British campaign "Move your Money"

Ethical banking: Reviewing your vows

Would you be content knowing that your money may be financing the arms industry or perhaps fossil fuel schemes? Do you really want your savings linked to tax heavens, risky speculation and customer fraud? These are the questions asked by the British campaign "Move your Money". It is a call for action which has already received over 600 pledges from people supporting more ethical financial institutions: they are disappointed customers that want their power back

from Manchester, UNITED KINGDOM

It can demand around three weeks to have it done. It is difficult to get an appointment and challenging to survive that requested interview that is full of confusing and indiscreet questions about personal likes and dislikes - books you read, music you love, activities you devote your spare time to, etc; but it is worth it, anyway. After dismissing the idea that, with such unnecessary questions, the agent was attempting to ask you for a date instead of providing you with assistance to open a bank account, it is all a mixture of relief and joy: you are finally holding the letter that proves your mutual engagement, signed by both parties and sealed with a kiss.

It is the beginning of a true love story, your love story, the story of the faithful customer and the charming bank. Needless to say, it can be amazingly promising. However, not all the love stories have a happy end.

Move your Money could easily be deemed the remedy to heal broken hearts. In two weeks, this British campaign has become the latest expression of customers' disappointment. It asks banks for the respect their beloved partners deserve.

In good times and in bad

Signing the document formally binds client and bank lives on well beyond the honeymoon period. Regardless of how hard it was to win the bank's affections, co-habitation brings us back down to earth and forces us to deal with the everyday issues of a relationship.

In 2011, HSBC was hit with a record 10.5 million pounds fine for selling unsuitable products to almost 2,500 elderly customers. That same year, another big bank, Barclays, was fined twice for selling completely unsuitable investments to its clients. In both cases, customers' satisfaction was clearly damaged. What kind of partner were they relying on?

For Danielle Paffard, campaign manager of "Move your Money", banks began failing their customers a long time ago. Banks have lost their customers' trust. They constrain loans to small businesses and domestic economies, while awarding giant bonuses to their directors and pouring clients' money into risky speculation and dirty businesses, like tax heavens, arms companies and fossil fuel industries responsible for a range of social and environmental crimes.

Plenty more fish in the sea

Considering these activities, it seems obvious the big banks are scoring very low in ethical rankings. The British organisation Ethical Consumer gives financial services such as Lloyds, RBS and Santander between 0.5 and 4.5 points in a scale of 20.

However, there are alternatives.

"Move your Money" encourages people to put their money (current accounts, saving accounts, mortgages) into more ethical and socially useful financial institutions: ethical banks, building societies, credit unions and community initiatives, amongst others.

Inspired by the Occupy Wall Street Movement, it is the British version of the American campaign that got 10 million people in the US to move their money into local financial institutions.

It invites people to give their pledge and make the change this March, during the Move your Money month. But it is also an opportunity to promote a deeper cultural change, raising social awareness about alternative banking and pushing the debate.

Some of the most important building societies and credit unions in the UK are in their thirties but they are not so well-known as famous big banks. Danielle Paffard points out that the main problem is people do not know there are alternatives. The other drawback that is often leveled at these ethical financial institutions is unfounded: "When people get to know these alternatives it is still difficult to change. For example, people think the process of moving their money is going to be annoying and it is going to go wrong, and I suspect in the past there was some truth in that, but now it is very simple".

No blind love

Unlike big banks, co-operative and mutual solutions have proven their resilience and honesty in crisis times but it is difficult for them to attract new customers. "Nothing is perfect", admits Danielle, "but there are much better than what we have got already and they are all good in different ways".

These alternative institutions get better ethicscores but there is still a lot to do. Some of them can also pay significant bonuses to their executives; and others either offer very limited services - e.g. just saving accounts and loans, not current accounts - or need to expand their network of branches to cover equally the whole country.

"Move your Money" does not expect people to serve divorce papers to their current bank by withdrawing all their savings overnight, but aims to enable people to weigh up all the available options and shop around for a more satisfying engagement.

The campaign manager concludes: "Move your Money is not going to break down the big banks - and it is not indeed what we want to do because they are perfectly capable of breaking down themselves, but it is about using our consumer power to bring something better".

Your cup of tea

The alternatives are various. "Move your Money" website offers detailed information about these alternative financial institutions with both their advantages and disadvantages. These are some quick ideas:

- Ethical banks aim to create social and/or environmental benefit as well as profit. Each bank has a different ethical focus and level of commitment but they get better ethicscores than conventional banks: the Co-operative Bank (13/20), Triodos Bank (15/20) and Charity Bank (17/20) are some examples

- Building Societies are mutual organisations owned by and run for the benefit of their members - their customers. They beat the big high-street banks on all measures of customer satisfaction according to the Building Societies Association. Nationwide (12.5/20) is one of them

- Credit unions are financial co-operatives, democratically owned and run by their members. They tend to be closely involved with their local communities. "Move your Money" highlights London Mutual, Bristol Credit Union and Manchester Credit Union

- Community Development Finance Institutions (CDFIs). Small, local organisations whose primary mission is to support communities by providing affordable finance that would otherwise not be available, like London Rebuilding Society

- Other innovative schemes that enable customer to lend and borrow directly from other individuals and allow them to choose directly where their money goes. Examples: Zopa and Kiva

(Published: 25.02.2012.)

British campaign "Move your Money"
Ethical banking: Reviewing your vows

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