With much of the role and autonomy of the traditional Bank branch Manager being replaced by computers and algorithms, the ability to treat each customer as an individual has become a thing of the past in the UK banking sector.
Having left the banking sector disillusioned in the 1990s, my journey took me on to become CEO at my local Credit Union - Coastal Credit Union - in Bournemouth, around the time of the 2008 financial crisis.
Leading their expansion immediately took me back to the reasons I enjoyed banking. I have taken that forward at Bloom, a new community interest company.
My experience had led me to believe that ‘fair finance’ is more important than ever.
So, what does the ‘fair finance’ sector look like in the UK?
Lacking a network of local banks, as the RSA has outlined in their recent report, Road to Resilience; how community financial services can level-up Britain, the key players in the UK are Credit Unions and Community Development Financial Institutions (CDFIs). These should be encouraged, but the system has done little to extend their coverage, with many closing their doors in recent years.
Bank of England Statistics for Credit Unions as of April 2019, shows there are 287 remaining credit unions in England, Scotland and Wales with 146 in Northern Ireland, with over 73 credit unions have ceased trading in the past decade.
According to the 2019 Community Investment Steering Group Report there are only around 23 active CDFIs the UK. All together these responsible finance providers only cover around 5% of the UK. Most of the Credit Unions and CDFIs have limited coverage and exposure and many are limited in the type of business they wish to be involved with.
Despite the demise of many Credit Union and other responsible finance providers, the importance of providing better access to fair financial products and services now and urgently across the UK, has been clearly evidenced in many independent reports.
What we do at Bloom
Drawing on my experience in the banking and credit union sector, I’ve built on this work to help establish Bloom, a Community Interest Company that aims to change the status quo of financial and social exclusion across the UK, by planting the right seeds to facilitate ambitious people, and help communities ‘bloom’.
We believe that financial and social inclusion is critically important to everybody, irrelevant of their post code. Throughout the UK everyone should have the tools to manage their money.
Most people who take out high cost credit do so because of an unexpected need for a few hundred pounds, coupled with their lack of savings and inability to access mainstream credit. Poor financial education means many people often don’t understand the cost of borrowing which can exacerbate inequality and poverty.
Bloom looks to contribute to a financially healthy UK by providing individuals and businesses, including social enterprises and charities, access to fairly priced borrowing and financial services. These services are delivered in partnership with communities in the form of charities, churches, housing associations, schools, universities or foundations who are already established and trusted by their clients anywhere in the UK.
Bloom also offers a Community Directory intended to help people via their Communities to find the products and services they need and offers the opportunities to help and support others in their community. It supports people with disabilities, their families, carers and wider circle of support throughout the UK and helps empower communities.
Other features of the Bloom offer include a money management system which incorporates financial education and rewards and ensures all commitments including loan repayments and linked savings are met. Bloom also actively encourages and rewards regular savings. Managed Bank Accounts offer non contactless debit cards and gambling use is banned. Bloom will also provide a range of help, including referrals to organisations looking to help with responsible debt management, which can offer positive change to people’s lives.
In the current Covid-19 crisis, it is already evident that the Banks will follow their own ideas and despite the best interests of the Government many Businesses, Charities, especially if Social Enterprises and any smaller businesses including Self Employed, are unlikely to actually get the support they desperately require. The need for a growing Responsible Finance sector has never been so important.
How you can help
In the past few months the world has moved to a very different place, as a result of Covid-19. However, we now believe that the need for Bloom is far greater than ever before and Community help is going to be a very important way to deal with matters.
Bloom needs to find additional, credible and committed Non-Executive Directors who understand the financial inclusion market, have knowledge of the regulators, and good contacts to help and assist the development of this work.
Bloom is also looking for ambassadors who can assist in promoting and finding community partners to work with Bloom, anywhere in the UK.
Mike Grimsdale FRSA is Mission Director of Bloom Finance. He started his banking career with Lloyds Bank in 1968 working in the banking sector until 1992. He is an Associate of the Chartered Institute of Bankers.
The speed of the UK banking industry's move away from cash and bank branches is harming many communities and poses real economic and social risks.