The Bank of Dave: How one man is challenging the high street giants
IT’S only 240 miles from Burnley to Canada, but sometimes it feels like it’s a completely different world. Unlike the skyscrapers of the City, my “bank” is based on a high street in Burnley. And it used to be a florist’s shop. That’s just one of the things that makes my little “bank” a bit different from anyone else. For starters, I’m not even allowed to call it a “bank” without those quotation marks.
I never had any desire to be a banker. My company sells minibuses and I have a lot of very good customers who I’ve known for a long time. As soon as the credit crunch happened in 2008, these people couldn’t get a loan from the banks they had been with for years, and so they couldn’t afford to get a new minibus. If nobody could buy minibuses, that would be a very big problem for my business.
I had to do something drastic to keep going through the recession, so I began lending my own money to my customers. Unlike the banks, I knew they were good and honest people who could be trusted. I was proven right, and it made me see just how wrong the banks had gone.
I knew things really weren’t right in the financial system when one of my bank managers came to visit me one day to offer me a loan I hadn’t asked for and didn’t need. He told me that his bank, a big one that I won’t name here, had been given money by the government and they had to lend it out. The problem was that he didn’t want to lend it to anyone who had the slightest chance they wouldn’t pay it back.
Basically, he wasn’t going to lend to anyone that really needed it.
After I gave him a piece of my mind and sent him on his way, I realised that someone needed to find a new way of banking – one that cares about people.
Then I realised that we didn’t need a new way of banking, we just needed to go back to the old-fashioned ways. We needed bank managers who got to know their customers and who based their decisions on people, not computers.
I thought, “They’re just taking in money and giving it to other people. How hard can it be?”
I quickly discovered that setting up a bank is actually very difficult.
I tried to go to the Financial Services Authority (FSA) to get a banking licence, but that didn’t go very well. They wouldn’t even meet with me unless I put millions of pounds in escrow for them. Given the size of what I was trying to do, I thought that was ridiculous.
I was beginning to understand why no new bank apart from Metro Bank has got a high street banking licence from the FSA in over a century. This is why I have to use the quotation marks whenever I talk about my “bank”.
Luckily, I’ve never been someone who takes no for an answer, so I worked with some top-notch lawyers in Manchester and found a way to use various other licences to create something that does all the important bits of what a bank does.
Finally, with the help of a lot of people who shared my dream – from the builders who helped me to refurbish our only branch to gaining support from MPs like Vince Cable, Steve Baker, Michael Meacher and many others – I declared my “bank” open.
Channel 4 has filmed the whole project, but that doesn’t mean it’s just a publicity stunt. You can take a trip to Burnley and see it for yourself. You might even get a loan – we lend an average of £25,000 every week. That’s money that’s going to small businesses and people in Burnley, where it makes a real difference.
Many of our customers have been rejected by the high street banks, but among hundreds of them we’ve barely had a missed payment. This is because I meet them face-to-face, and take time to get to know their businesses and, more importantly, whether they’re a person I can trust. In short, I judge them as people, not as credit scores.
We don’t just offer a better way for borrowers. We help our customers achieve 5 per cent on their savings. And, instead of paying ourselves bonuses, we are donating every penny of operating profit to charity.
As I said, sometimes Burnley can feel like a different world to the City.
David Fishwick is a Burnley-based businessman. Bank of Dave starts on Thursday 12 July at 9pm on Channel 4. A book to accompany the series is available now (Virgin, £12.99).