Bank-Bashing: have banks done their time?

Bank-bashing has rapidly become a national pastime, along with discussions of the weather and bemoaning the amount of time millennials spend on their phones. In 2011, The Independent ranked Sir Fred Goodwin, the former CEO of RBS, the 4th most hated person in the UK. Meanwhile, Seán Fitzpatrick, ex-chairman of Anglo Irish bank, proved so unpopular that people bid in a charity event for the chance to crush his reclaimed BMW. It’s safe to say big bank bosses are having a bit of a bad run.

The consistent controversy surrounding banks has unsurprisingly compromised the public’s trust. Yet banks continue to function and their survival remains integral to economic stability. So what happens next? Is it time for the public to simply ‘get over it’? This forgive-and-forget attitude assumes that the current focus on placatory apologies distracts employees from their actual job: ‘running the bank’. However, the seismic revelations about recent banking practice suggest the whole understanding of what it means to be a bank must be reconsidered.

What does it mean to be a bank?

The benefits of banks lie in their ability to catalyse social progress, through investment in innovative business ideas. However, historically, this function has only been accessible to the select few. For example, the Medici bank – often famed as the world’s first modern bank – was an indisputably upper-class enterprise, managing and furthering the fortunes of their exclusive, even royal, clientele.

However in recent times, some banks are bringing powerful and progressive change to the masses, such as Grameen Bank. Based in Bangladesh, the enterprise bridges the gap between bank and accelerator of socio-economic progress. Although not immune from criticism of its own, its core principle of removing the requirement of collateral when securing a loan is courageously customer-focused. With a loan recovery rate of 96.6%, their work is testament to the capacity for true social progress when banks generate genuine trust. However, it also demonstrates the financial viability of empowering those conventionally ostracised from banking practice. By October 2011, the bank had 8,349 million borrowers; all from a poor, rural background, and 97% women. Grameen Bank has thrived by reconsidering, and even reversing, conventional banking practice.

Kickstarter is founded on a similarly democratising premise. Every day 80 projects are launched, and every week $1 million pledged. People enjoy their interaction with Kickstarter, as it humanises the ‘big banking’ notions of investment, innovation and financial ventures. Why is Kickstarter such a success? It helps people bring their ideas into reality. Its central offering is empowering the everyman. Interaction with Kickstarter isn’t a burdensome necessity, but an enjoyable and exciting experience.

In contrast, big commercial banks failed because they innovated inwardly. Their developments were not grounded in improving the experience for customers and clients. Never has the disconnect between banks and customers been clearer, mirroring an industry that cowered beneath the weight of personal interest.

Is it time to forgive and forget?

In no other industry could you expect the onus for reinvigoration to lie with the consumer. It is the commercial equivalent of a disgruntled politician blaming the public for voting for the ‘wrong’ person. If people need to rethink how they perceive banks, banks need to make them want to. If banks want to be the pioneers of innovative industry, they need to show the customer they care.

Google, a widely trusted and creative brand, used the tagline ‘Don’t be Evil’ for 15 years. Could a bank ever commit to such a determined, positive statement? It seems difficult to imagine. While banks are attempting to assure clients of reliability through various initiatives, successful commercial companies such as Google, Innocent and Virgin create trust by connecting to their customers. Their ‘trust’ cannot be segregated into a single initiative; it saturates the entire business structure. If banks want people to believe they have truly changed, they need to demonstrate it, starting from the inside out. 

Banks may have the potential to be engines of social progress, but they need to persuade the public they are worth fuelling. This will require evidence of innovation in the interest of individuals and businesses, rather than the sole pursuit of profit margins. If banks want to succeed, prioritising people is central to the solution.