Last week in Edinburgh at the Building Societies Association Annual Conference, one theme came through consistently: is that whilst growth is still on the agenda — and it is being actively encouraged at a policy level, however, for building societies, the reality is more complex. Growth is not simply a strategic choice; it is constrained by capital requirements, liquidity expectations and regulatory frameworks that were not designed with today’s growth ambitions in mind. This creates a fundamental tension on the balance sheet — how to expand lending while maintaining prudent capital and liquidity positions.
From a Treasury and Asset & Liability Management perspective, this challenge is becoming increasingly acute. Societies must carefully manage interest rate risk across long-dated mortgage books, while also navigating more competitive and rate-sensitive retail funding markets. The margin for error is narrowing, and traditional approaches to balance sheet management are being stretched.
What was clear from conversations at the event is that technology is now a key enabler of sustainable growth. Better data, faster analytics and more dynamic balance sheet modelling are no longer “nice to have” — they are essential to:
- Optimise capital and liquidity usage
- Respond quickly to market and rate changes
- Support informed, forward-looking decision making
At MORS, we see this as a pivotal moment for the sector. Those societies that invest in modern Treasury and ALM capabilities will be better positioned to align regulatory compliance with growth ambitions — turning constraint into a source of competitive advantage.
The question is no longer whether to modernise balance sheet management, but how quickly it can be done.
#BuildingSocieties #Treasury #ALM #BalanceSheetManagement #RiskManagement #FinancialServices
