With a savings total of £490 million (US$613 million), up 17% annually, Scottish Building Society, the oldest mutual in the world, has posted its largest savings balance in its 175-year existence.

According to Scottish Building Society's annual report, the company's pre-tax profits, which total £4 million (US$5 million), are also at an all-time high.

Additionally, its overall assets have increased 15% year over year to £740.7m (US$926m), while its mortgage assets have increased 8% year over year to £535.5m (US$669.8m).

However, why this historic mutual now? What has propelled this year of record breaking?

How Scottish Building Society cut costs to all-time highs

The success of Scottish Building Society today may be attributed to a significant shift in depositors' behaviors, with trust being more crucial than ever when it comes to choosing a financial management company.

In an attempt to match the success of the growing number of well-liked neobanks and digital banks, banks have chosen in recent years to reduce their physical presence by shutting branches in favor of digital-first services. Global banks have reduced their product offerings as part of their digital transformation.

This has created an opportunity window for mutuals, such as credit unions and building societies. Recipients who prefer in-person services—or underprivileged groups in society who lack access to digital technology—have shifted from big financial institutions to smaller, more individualized businesses.

Although a lot of credit unions and building societies are using digital ecosystems to update their offerings, the majority of them are still dedicated to providing personal banking services and having a physical presence.

A good example is Nationwide, which has pledged to maintain all of its locations open until at least 2028 and acquired Virgin Money in order to expand its digital offerings.

"2024 would prove to be the year of the credit union," according to Zur Yahalom, SVP and Head of Financial Services for North America at Amdocs, who made this prediction earlier this year. Credit unions, along with building societies, are figuring out a new approach to compete with traditional banks.

One effective rival is Scottish Building Society, which promotes straightforward goods and in-person services to generate steady development in all areas, including mortgage assets, savings balances, and membership counts.

Six connection centers are run by the building society in Scotland: Glasgow, Edinburgh, Aberdeen, Inverness, Galashiels, and Troon.

"These historic results are the accumulation of a nearly two-century commitment to providing fair and trusted support to our membership," states Paul Denton, CEO of Scottish Building Society.

"As a mutual, our members—not shareholders—are the only people for whose benefit choices are made. We are reinvesting in the things that our membership says us are essential to them during a time when banks are trying to save expenses.

"We are committed to ensuring that passbook accounts are available to anyone who wishes to use them and to continuing our human-first approach to personal finance, which is why we opened a new relationship center in Edinburgh over the past year."

"These values have guided our society since its founding, and it is very encouraging to see more people coming to us for support in their journey at a time when customers are evaluating who they trust with their finances."

Scottish Building Society: A dedication to benevolence

Additionally, the commitment of Scottish Building Society to charity activities shows that customers are still drawn to businesses that prioritise local causes.

The Scottish Building Society Foundation was established just last year to commemorate the building society's 175th anniversary. It will now provide £175,000 (US$218,000) to charitable projects around Scotland.

According to Denton, the establishment of the Foundation formalized their commitment to give back to the community. In less than a year, they have already raised over £60,000 to help organizations ranging from Wick to Galashiels.

"We are doubling down on our beliefs and are laser-focused on continuing to provide for our members and the communities we serve because we are painfully aware that the economic conditions remain uncertain.”