Nationwide take over of Virgin Money

Section62

WillPS said:

Section62 said:

What it is about being a mutual that means big decisions shouldn't be made on the same basis?

Seriously? You think members of a building society have an equal level of interest in their society as people who've invested money in shares of a company? There's no perceivable difference you see in an adult with a passbook savings account and their view (or even interest in) what might be right or wrong for the building society they happen to hold some cash with vs an adult who has made a deliberate choice to exchange their money for shares in a business as an investment?

What about the impact of a bad investment decision in each case? Where would that leave someone with the life savings invested in a bank vs a passbook account holder with <£85k in?

The difference in outcomes (good or bad) is gigantic. Massive false equivalence.

I think you might be confusing the intrinsic value of the organisation itself, and the deposits/loans the organisation holds?  Or perhaps you don't understand the mutual model?

Nationwide members own part of the organisation, as well as having deposits/debts with them.  If Nationwide were to demutualise then each member's stake in the organisation would be converted to a cash value, in the same way shares in a PLC have value.

If Nationwide's board are making a catastrophic mistake in buying VM (Cf. Co-op/Britannia) then the value of each member's stake will be compromised.

So yes, "seriously". Although the member stake in Nationwide is not tangible in the way PLC shares have a listed value (and some members have assigned theirs to charity), a bad decision made by the NW board could have an equivalent impact on members as the same bad decision might have on shareholders of a PLC.

In fact I'd say it could be worse, since mutuality is supposed to bring benefits to members, loss of mutual status (e.g. due to a rescue by one of the "bad" banks) should in theory result in the loss of those benefits.  (I say that as a former CIS/CFS customer who feels the implosion of Co-op has left us with less than we had). (also as a former AA member, but through a different cause)

WillPS

Section62 said:

WillPS said:

Section62 said:

What it is about being a mutual that means big decisions shouldn't be made on the same basis?

Seriously? You think members of a building society have an equal level of interest in their society as people who've invested money in shares of a company? There's no perceivable difference you see in an adult with a passbook savings account and their view (or even interest in) what might be right or wrong for the building society they happen to hold some cash with vs an adult who has made a deliberate choice to exchange their money for shares in a business as an investment?

What about the impact of a bad investment decision in each case? Where would that leave someone with the life savings invested in a bank vs a passbook account holder with <£85k in?

The difference in outcomes (good or bad) is gigantic. Massive false equivalence.

I think you might be confusing the intrinsic value of the organisation itself, and the deposits/loans the organisation holds?  Or perhaps you don't understand the mutual model?

Nationwide members own part of the organisation, as well as having deposits/debts with them.  If Nationwide were to demutualise then each member's stake in the organisation would be converted to a cash value, in the same way shares in a PLC have value.

If Nationwide's board are making a catastrophic mistake in buying VM (Cf. Co-op/Britannia) then the value of each member's stake will be compromised.

So yes, "seriously". Although the member stake in Nationwide is not tangible in the way PLC shares have a listed value (and some members have assigned theirs to charity), a bad decision made by the NW board could have an equivalent impact on members as the same bad decision might have on shareholders of a PLC.

In fact I'd say it could be worse, since mutuality is supposed to bring benefits to members, loss of mutual status (e.g. due to a rescue by one of the "bad" banks) should in theory result in the loss of those benefits.  (I say that as a former CIS/CFS customer who feels the implosion of Co-op has left us with less than we had). (also as a former AA member, but through a different cause)

Thanks for the condescension but I know fine well what a mutual is, it's you who is attempting to assert rights/responsibilities beyond those which exist, not me! 

The point is that shares in a listed PLC have an intrinsic value because they are bought and sold. Collapse of the value in those shares has a direct impact on the shareholder's financial position.

Building society membership has no intrinsic value whatsoever and collapse of the value of the society would not affect the member's financial position one jot.  [In fact, in the case of Nationwide since the 90s new members have had to commit to charitable assignment - effectively the member declares they understand they absolutely will not gain or benefit from demutualisation, so you can't even argue that those members are losing a potentially valuable asset. ]

That's why shareholders have a right to a vote when major purchases happen, but members of a building society do not in the same circumstances. It's part of "the deal".

Perhaps if you feel it should be put to a vote in future, you could seek to pass a resolution at the AGM which would bind the board in future situations. (It won't pass, obviously, but there's your democratic opportunity.)

noh

friolento said:

Albermarle said:

No ability to set up new payess, have to use the card reader
For info this has changed just in the last few days, if you register your photo with them the card reader will be redundant. So progress !

They have managed to mess this up.

I was invited to register, using a card reader, for the card-reader-less payments. I eagerly followed the instructions, just to be told there were system problems and I should try later. I tried later, with the same result. After multiple tries, I rang Nationwide CS who said there was nothing wrong with their systems and I should try again. Didn't work. They then said I didn't have the latest app version. Wrong again. Then they tried to tell me my phone (iPhone 15 Pro Max, on iOS 17.3 at the time) was not supported. When I asked where the list of supported phones was, they said I need to go into Branch as they could sort it for me.

On my own initiative, I then uninstalled the Nationwide app and re-installed it. This newly installed version no longer has a splash screen inviting me to register for card-reader-less payments but I can change it in Settings. In theory. In practice, I am "not eligible for account biometrics at this time". I have used biometric login for the Nationwide app literally for years. I have been a Nationwide customer for 24 years. I am also less than impressed with Nationwide's app right now and won't be using them as my main current account anytime soon. I can imagine that it will get much worse when Nationwide acquire the hotchpotch of Virgin Money apps and systems

Works for me on iPhone Plus 15 iOS 17.3.1
I had no problem registering my photo in the app

Middle_of_the_Road

Nationwide are behaving exactly like the bank they're aiming to be. They've grown to the point of being able to bid for the banks themselves. Saying they're different for their members, and at the same time knowing any voting rights are worthless.

Section62

WillPS said:

The point is that shares in a listed PLC have an intrinsic value because they are bought and sold. Collapse of the value in those shares has a direct impact on the shareholder's financial position.

A listed PLC has value because there is something behind the share that people believe to be worth something - whether an income/profit from some activity, or assets the company has.

Shares are bought and sold (at least in part) because of people's changing belief in the value.

WillPS said:

Building society membership has no intrinsic value whatsoever and collapse of the value of the society would not affect the member's financial position one jot.  [In fact, in the case of Nationwide since the 90s new members have had to commit to charitable assignment - effectively the member declares they understand they absolutely will not gain or benefit from demutualisation, so you can't even argue that those members are losing a potentially valuable asset. ]

You've referred (disparagingly) in previous posts to "carpet baggers".  In light of the BiB above, why do you think people carpetbag building societies?

I would argue that all members would lose a potentially valuable asset.  Firstly, the benefits of membership of a mutual building society. Secondly, your use of "...absolutely will not gain or benefit..." mis-states the probable true position.  AIUI there are circumstances in which the charitable assignment could be revoked or nullified.  Therefore members who were subject to the charitable assignment requirement retain (at least a theoretical) possibility of gaining in the same way as pre-assignment members would.  Their loss would be the chance that they would otherwise be eligible for a payout, but for the fact the society's value has collapsed. If a situation arose in which members were asked to consider demutualisation I strongly believe the board would also make provision for the effect of the charitable assignment to be nullified.

WillPS said:

That's why shareholders have a right to a vote when major purchases happen, but members of a building society do not in the same circumstances. It's part of "the deal".

Perhaps if you feel it should be put to a vote in future, you could seek to pass a resolution at the AGM which would bind the board in future situations. (It won't pass, obviously, but there's your democratic opportunity.)

It is practically impossible for an individual member to get a resolution voted on at the AGM, so your suggestion is useful, but not realistic. There is no such "democratic opportunity" in practice.

But I am interested in why you say "It won't pass, obviously"?  What is your thinking behind that?

Rich1976

Middle_of_the_Road said:

Nationwide are behaving exactly like the bank they're aiming to be. They've grown to the point of being able to bid for the banks themselves. Saying they're different for their members, and at the same time knowing any voting rights are worthless.

Nationwide have behaved like a bank for years and just come across totally hypocritical when comparing themselves to the banks. Branch closures for example, they have closed 3 where I live in the last couple of years yet their adverts claim they will keep branches open.

when we were with them we always found the customer service to be average , a branch member of staff would tell you something different to what a call centre operator said. There were issues with isa transfers such as missing application forms, losing a formal complaint made even though it was done over their secure messaging system, credit cards which were not sent prior to expiry of the previous one.

their savings interest rates and other rates are not that much different to their main competitors.

frankly i would be hard pushed to find a reason to go back to them, mutual or not.

boingy

Parts of this thread remind me of this XKCD:

Rob5342

WillPS said:

Rob5342 said:

Albermarle said:

Rob5342 said:

Could one of you actually explain what critical features the Nationwide app is lacking?
Genuine question as I am not sure what I am missing.

No transaction notifications

No budgeting features

No pots to seperate money

No card controls

No pin reminders

No ability to see debit card number in the app

No cheque pay in feature

No ability to set up new payess, have to use the card reader

No ability to see all payments made to one shop

No pay nearby people feature

No split the bills feature

No cashback on certain retailers

No ability to see direct debts due to be taken in the next day or two

No ability to see other accounts with open banking

New accounts take days to appear

No ability to see tranaction location on a map

No ability to send a link to request money

OK, they might not be absolutely critical and not every bank has all of them, but they make things a lot easier and most banks make at least a half hearted effort to include some of them. Nationwide seem to have no interest whatsoever in implementing anything remotely modern. It's quite bizarre.

No ability to set up new payess, have to use the card reader
For info this has changed just in the last few days, if you register your photo with them the card reader will be redundant. So progress !

That's good news, maybe in 20 years they'll add one of the other features.

I find it bizarre that a company whos whole business is banking has such an archaic app. Given what other apps can do in terms of removing people from photos etc you wouldn't think adding notifications for payments would be very difficult.

I'm not sure about Nationwide specifically but AIUI the limiting factor with payment notifications specifically is not on the apps but on the banking systems themselves, which process everything using batch jobs - in simple terms there's a delay between the transaction occurring and the app becoming aware of it, which is problematic if you are then notifying customers that 'spending has just happened'.

LBG seem to have partially overcome this by increasing the throughput of their batch routines but we quite often see complaints of delayed notifications on here.

If immediacy is something you value then you really are better off using Chase, Starling or Monzo - who don't have the bottleneck in the first place by virtue of having banking systems which are less than a decade old.

I have a Halifax account and the notifications are pretty useless, often taking over an hour to show up. I use Monzo for my main account and I think they are great, exactly how banking should be. Nationwide are a creaking dinosaur with a broken zimmer frame and I'd never use them for my main banking.

I'm sure a lot of it does depend on their back end systems, but I don't see why they can't have updated those on the decade or so since app banking arrived. 

Rich1976

Rob5342 said:

WillPS said:

Rob5342 said:

Albermarle said:

Rob5342 said:

Could one of you actually explain what critical features the Nationwide app is lacking?
Genuine question as I am not sure what I am missing.

No transaction notifications

No budgeting features

No pots to seperate money

No card controls

No pin reminders

No ability to see debit card number in the app

No cheque pay in feature

No ability to set up new payess, have to use the card reader

No ability to see all payments made to one shop

No pay nearby people feature

No split the bills feature

No cashback on certain retailers

No ability to see direct debts due to be taken in the next day or two

No ability to see other accounts with open banking

New accounts take days to appear

No ability to see tranaction location on a map

No ability to send a link to request money

OK, they might not be absolutely critical and not every bank has all of them, but they make things a lot easier and most banks make at least a half hearted effort to include some of them. Nationwide seem to have no interest whatsoever in implementing anything remotely modern. It's quite bizarre.

No ability to set up new payess, have to use the card reader
For info this has changed just in the last few days, if you register your photo with them the card reader will be redundant. So progress !

That's good news, maybe in 20 years they'll add one of the other features.

I find it bizarre that a company whos whole business is banking has such an archaic app. Given what other apps can do in terms of removing people from photos etc you wouldn't think adding notifications for payments would be very difficult.

I'm not sure about Nationwide specifically but AIUI the limiting factor with payment notifications specifically is not on the apps but on the banking systems themselves, which process everything using batch jobs - in simple terms there's a delay between the transaction occurring and the app becoming aware of it, which is problematic if you are then notifying customers that 'spending has just happened'.

LBG seem to have partially overcome this by increasing the throughput of their batch routines but we quite often see complaints of delayed notifications on here.

If immediacy is something you value then you really are better off using Chase, Starling or Monzo - who don't have the bottleneck in the first place by virtue of having banking systems which are less than a decade old.

I have a Halifax account and the notifications are pretty useless, often taking over an hour to show up. I use Monzo for my main account and I think they are great, exactly how banking should be. Nationwide are a creaking dinosaur with a broken zimmer frame and I'd never use them for my main banking.

I'm sure a lot of it does depend on their back end systems, but I don't see why they can't have updated those on the decade or so since app banking arrived. 

Because it costs a lot of money to update systems especially when extra functions have been bolted on, it would be a massive headache if they got it wrong .

WillPS

Section62 said:
You've referred (disparagingly) in previous posts to "carpet baggers".  In light of the BiB above, why do you think people carpetbag building societies?

Did I hit a nerve? It wasn't intentional.

The answer is in the present tense they don't; the time for it was clearly before most societies started building walls internally to defend themselves from it (charitable assignment in the case of Nationwide) and certainly before the previous financial crisis when most of the ones that went hit their end game (and the conditions which made demutualisation so tempting were eroded as regulation was stepped up in their wake).

Them days are over, I'm afraid.

Section62 said:

I would argue that all members would lose a potentially valuable asset.  Firstly, the benefits of membership of a mutual building society. Secondly, your use of "...absolutely will not gain or benefit..." mis-states the probable true position.  AIUI there are circumstances in which the charitable assignment could be revoked or nullified.  Therefore members who were subject to the charitable assignment requirement retain (at least a theoretical) possibility of gaining in the same way as pre-assignment members would.  Their loss would be the chance that they would otherwise be eligible for a payout, but for the fact the society's value has collapsed. If a situation arose in which members were asked to consider demutualisation I strongly believe the board would also make provision for the effect of the charitable assignment to be nullified.

You can argue anything has any value you like, it means nothing if you have no ability to realise that value. That's a very different position to owning a trade-able share. Presently it cannot be sold. Nobody is relying on any Building Society's performance as a company to assure their future.

This is to say nothing of charitable assignment.

Section62 said:

It is practically impossible for an individual member to get a resolution voted on at the AGM, so your suggestion is useful, but not realistic. There is no such "democratic opportunity" in practice.

But I am interested in why you say "It won't pass, obviously"?  What is your thinking behind that?

You've answered your own question. Even if you gained sufficient momentum the board would advise to vote against and that'd be the result (find me a single result in a Nationwide AGM where the advice of the board was not followed and I'll show you some ancient history).