I had a very interesting conversation with a representative of the Bendigo and Adelaide Bank. No big banker's bonuses or call centres in this bank. It is owned by the community and operates on a franchise model. Profits from the bank are invested back into the community with the community deciding where they should be spent.
As we already own the RBS maybe it could be transferred to community ownership? Definitely feels like an idea whose time has come in the UK.
"Community Bank is an innovative franchise program in which the local community owns and operates a Bendigo Bank branch (which is separately incorporated) and Bendigo Bank provides all the banking infrastructure and support. The community company and Bendigo Bank share all branch revenue with whatever is left over, after the company pays its branch running costs, remaining as profit. The program was a response to the massive closure of bank branches in rural areas. Bendigo Bank has since extended the program to areas that have bank service."
According to Smart Money.com, "the three-year failure rate for new banks is less than one in 1,000," which, compared with a "60 percent failure rate for new restaurants," is not so horrible. The profits are not too shabby either.
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