A Regional Banking Revolution for the 21st Century - RSA

A Regional Banking Revolution for the 21st Century

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  • Picture of Mark Hall
    Mark Hall
    Deputy Head of Engagement, RSA
  • Community Banking
  • Transform
  • Fellowship in Action

Eighteen months in to our partnership with the Community Savings Bank Association (CSBA), we are showing what a valuable partner we can be.

As displayed on the incredible mural that Andrew Park has created for our new Rawthmells coffeehouse, the RSA has a rich history of supporting innovations. Many of these have had RSA Fellows at their heart, including a campaign to extend the reach of the post office savings bank beyond the elites in the mid-19th Century. The RSA’s involvement in ground-breaking initiatives such as these shouldn’t be confined to the history books and my current role at the RSA was established to re-think how we can do this in the 21st century. 

The CSBA was in many ways the perfect initiative to test out this new approach. Regional community banks were cited in the final report of our 2017 Inclusive Growth Commission as having a potentially ‘…powerful role in driving inclusive growth’. 

The model is based on an old idea of local relationship banking, re-purposed for the 21st Century, by utilising modern technology to complement a staffed branch network. It is bold in its ambition to create a UK-wide network of customer-owned, regional banks that will serve the everyday financial needs of ordinary people, local community groups, and small and medium sized companies.

Having spent three years with an experienced team developing the ‘bank in a box’, which incorporates everything needed to start the process of setting a bank up, they were ready to scale needing three core elements; the right people to steer it through the rigorous banking licence application, £20 million investment to capitalise the bank, and members ready to try a different kind of bank.

There are three regions that have a bank in development; London, the South West, and West of England. We have been working with them for around eighteen months and our recent impact report showed that:

  • The three most developed banks state the RSA’s role as vital to their success so far
  • Chairman of the CSBA states the RSA’s role as ‘invaluable’ to its success so far
  • Investment of £60K confirmed for Avon Mutual from Fellowship Networks
  • We have played an Important role in building relationships with potential institutional investors
  • 4 NEDs and 2 Founding Director in place through RSA networks
  • We have raised the profile of the banks with 50 influential politicians at local and national level
  • Over 600 people have registered an interest with regional banks via the RSA
  • Over 14,000 views of RSA blogs on community banking

You can read more about the journey of one of these banks, Avon Mutual, in these two blogs from founder Jules Peck:

To make this happen we have utilised the RSA’s public events platform; social media following; expertise from our research team; as well as the enthusiasm, expertise, and networks of our Fellows.

CSBA Chairman, James Moore, says:

Our partnership with the RSA has been invaluable. It has helped us open doors with central and local government, mine their influential Fellowship networks for key contacts, and promote this work to a wide audience. We are excited to be continuing this journey with the RSA and working with them to realise our vision of re-building regional banking in the UK.


Building influence through local organising

Over the course of 2017/18 we hosted a series of events across the South West of England. In February 2018 we hosted a public event in the Devon market town of Newton Abbot, in partnership with Helen Chessum, the chair of a local community organisation, Transitions Newton Abbot. Over 50 people attended including key decision makers and influencers such as the local MP and both councillors and officers from Devon County Council. As well as helping to build momentum with Devon Council, several potential early stage investors registered an interest and the local MP connected us to someone with significant banking experience as a potential chair.  A few weeks later in the Cornish city of Truro we convened a meeting with support from RSA Fellow and Cornwall Council officer, Stephen Horsroft. The meeting included talks from influential Fellows from the Cornwall Business Partnership and Chamber of Commerce. This was very well attended by key figures from Cornwall Council who are now in discussion with South West Mutual about potential support and investment.


Fellows investing in their region

Each bank’s ability to raise £20 million investment during the start-up phase is critical to its success. While we expect most of this money will come through institutional investors such as local authorities, where we have helped build support across the UK, a successful initial funding round is important to get the backing of local investors and fund some of the early work that is needed. This was one of the main aims of our series of five events across the West of England in early 2018. Each of these events had between 25-40 attendees and as well as making some key connections with local government and anchor institutions, each event created leads to potential early investors. This led to £60k of the first £300k raised by Avon Mutual coming through RSA networks.


Sharing learning across the network

As well as the various engagement work we have done to build support for these banks, we are also working closely with the people involved to share learning across the network. Any start-up is challenging but this will be the first ever network of regional co-operative banks in the UK and international evidence shows that collaboration is vital to making this a success. To support this, we have developed a learning network which all new banks will be able to participate in. This involves regular online catch ups on zoom, a slack group for real time conversations and a file sharing platform used to develop shared resources. One of the participants who supports work across the network, Fionn Travers-Smith, provided the following feedback:

The RSA’s support in establishing and facilitating a learning network amongst our mutual banks has been invaluable for nurturing collaboration, visibility, and coherence amongst our distinct but related banking projects. Every member of the group is time poor and grappling with heavy cognitive loads and work pressures. Having a dedicated space and support structure to “step back” and see the bigger picture, to think strategically and to actively work on aligning our efforts has been incredibly helpful.

We anticipate it will take around three years to set up one of these banks, so we are very much at the start of this journey. We are really encouraged by progress so far and the CSBA are now a few steps closer to realising their vision of having locally rooted independent banks in our communities across the UK. There are many more steps to take but we are excited to be walking the walk with them – we hope you will join us.


How can you help?

We are keen to hear from Fellows and others with relevant expertise to support this work or anyone who is interested as a potential certified or institutional investor. For more information please get in touch with me at [email protected].

If you would like to read more about the impact we've made with the CSBA so far follow the link to read our Annual Impact Report: October 2018 in full.

Mark Hall is Deputy Head of Engagement at the RSA where he leads RSA Transform, an ambitious new programme which mobilises the RSA’s unique resources behind the bold visions of our Fellows. You can find him on twitter @MarkHallRSA.

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  • I’m interested in how credit unions can link with regional banks and how local control can be maintained

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