Mundo Empresarial. Special report: Ethical banking and banking on values

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Full report preview • 2018

Special report:

Ethical banking and banking on values

MUNDO EMPRESARIAL

Special report: Ethical banking and banking on values

Interview with

Pierre

Moscovici

European Commissioner for Economic and Financial Affairs

Text: Esther Herrera. Brussels

Photos: European Commission

Pierre Moscovici (Paris, 1957) is a Social Democrat and firm pro-European with a long political career: He went from being a member of a French Trotskyist party in his youth to becoming one of the most visible faces of the Socialist left in his country. A graduate of the prestigious ENA (École Nationale d’Administration) and an avid reader and writer, he was born into a renowned family of intellectuals with Polish and Romanian ancestry. He has been an MEP, Vice-President of the European Parliament, Minister of the Economy and Secretary of State for European Affairs.

T

en years after the economic crisis, is the worst behind us? Or should we expect more reforms?

The crisis is definitely over. Over the last year we’ve moved on from a phase of recovery to one

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of economic expansion, with 2.5% growth in the eurozone in 2017, the highest figure in 10 years. In the labour market, recruitment is high and unemployment has fallen to the levels of 2009, although we

have to continue monitoring salaries and the high number of parttime contracts. As for the deficits, although they’ve fallen sharply, reaching their lowest levels since 2007, the reduction of the public

Special report: Ethical banking on values MUNDOMUNDO EMPRESARIAL En Portada Medicinaandde banking Vanguardia Desde Bruselas GLOBAL

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“THE CONSEQUENCES OF LARGE-SCALE TAX EVASION ARE REAL, THE CITIZENS CAN SEE THEM. AND THAT’S UNACCEPTABLE”

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Special report: Ethical banking and banking on values

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“The worst [of the crisis] is over, but there’s still the need for a greater effort by the European governments to ensure that growth goes on and that the gains continue. The best time to fix the roof is when the sun comes out.”

debt should remain a priority. So, yes, the worst is over, but there’s still the need for a greater effort by the European governments to ensure that growth goes on and that the gains continue. The best time to fix the roof is when the sun comes out.

Despite its growth, Spain is the country with the second highest unemployment rate, and many of the jobs are of low quality. Don’t you think there’s a false impression of economic recovery?

The recovery in Spain is real. It’s one of the fastest-growing eurozone economies, above 3%. The growth is expected to remain solid. With regard to the labour market, it’s one of the countries with the greatest improvement; the reforms and the wage moderation are paying off. And while it’s true that unemployment remains very high, especially among young adults and people with fewer qualifications, the latest reforms have been moderately positive in reduc-

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ing the segmentation of the labour market.

You’re in favour of creating the figure of the European Minister of Economy and Finance. Why now?

Because now we have an open window, an opportunity. It will only be open for a few months, until the European leaders decide, in June, how to resolve one of the key issues, namely how to enhance the effectiveness and democratic accountability of the decisions made in the eurozone. Our current governance model suffers from a flagrant lack of democracy, particularly in the Eurogroup. This is because this group was created as an informal group, although it currently makes important decisions in relation to national budgets and the countries’ reforms. These resolutions are prepared first by the countries’ representatives, in almost total secrecy, and then approved by the ministers behind closed doors. It’s true that some ministers undergo more scrutiny from their national parliaments than others, but none of them are accountable to the European Parliament concerning the joint decisions reached by the Eurogroup. This is why we’ve proposed the creation of a European Finance Minister: he or she would reinforce the transparency and democratic accountability of the decisions made by the Eurogroup, benefiting all the citizens.

The European Commission has expressed its disappointment over the European “non-cooperative jurisdiction” list recently approved by the Council of the EU. Is there a lack of ambition in the EU countries?

I think this blacklist of tax havens is the beginning of a very constructive process. Some people, understandably, have expressed their disappointment with respect to the

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Pierre Moscovici is the son of two illustrious intellectuals and the author of more than 10 books. He says that writing ideas on paper “helps me to focus on my work objectives, especially in a job like mine, in which I have to put out fires almost every day”.

identities of the countries on it, but we should remember that it’s not a definitive list. What needs to be underlined is that 55 jurisdictions have managed to avoid being on it, but only because they appear on the “grey list”, by committing to make changes in their legislation, and that’s also important. From the beginning I’ve worked on making this process credible. And I’ll continue to insist on the importance of the Member States applying the necessary sanctions to the countries which don’t undertake reforms in this regard.

What do you think the main problem with tax havens is? Could limiting the relationship with them as, for example, ethical banking does, help to eradicate them?

The main problem is that tax havens make it easier not to pay taxes on profits. The taxes aren’t being paid in the Member States and, as a result, their governments don’t have the necessary resources to finance public services or to invest, for example, in health, research and education. The consequences of large-scale tax evasion are real, and the citizens can see them. And that’s unacceptable.

In addition, in the future it won’t be possible for European funds to end up in jurisdictions that are on the black list, although some projects (we should remember that some of these states are recipients of development aid) will continue, but under certain conditions. However, more must be done. This is

why I believe that the EU Member States must approve real sanctions that will be the definitive step towards putting an end to tax havens.

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Special report: Ethical banking and banking on values

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“The Trump Administration has taken decisions that we don’t agree with. I’m referring, for example, to its withdrawal from the Paris Climate Agreement.

But I want to emphasize that, in general, we maintain a constructive relationship with the US Administration.”

According to a recent S&P study, the United States is the main economic risk to the eurozone. Does the Trump Administration’s economic policy worry you?

I wouldn’t put it quite like that. Obviously the Trump Administration has taken decisions that we don’t agree with. I’m referring, for example, to its withdrawal from the Paris Climate Agreement. But I want to emphasize that, in general, we maintain a constructive relationship with the US Administration. I met Steven Mnuchin, the Treasury Secretary, several times last year, as well as Gary Cohn, President Trump’s chief economic advisor. A year after his election, transatlantic economic relations remain healthy and both sides have a common interest in keeping things that way. Meanwhile, the EU continues to move forward as a result of new trade deals, such as those signed with Canada and Japan. Therefore, regardless of the decisions made by our North American friends, we will maintain our determination to reject protectionism and remain open to the world.

The European FTT (Financial Transaction Tax) has not been approved yet. Do

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you think it will eventually go ahead?

The tax is an idea which is as valid now as it was when the Commission proposed it. How it will progress and how fast is purely a matter of political will. But bearing in mind all the time and effort we’ve devoted to it, I think it would be a pity if it didn’t come to fruition. The reasons why the Commission proposed the application of a fee on transactions are still valid. Firstly, because there are already several countries which apply their own FTT on a national scale.

But this fragmentation can cause, for example, dual taxation. A harmonized tax could solve this problem.

Secondly, because there is a need for the financial sector to contribute to public services. Our citizens expect this. And, thirdly, because a well-designed financial transaction tax would promote long-term investment. Therefore, there are no reasons why the process should be delayed. Not even because of Brexit, an argument often used in the financial sector.

You’ve written more than 10 books and recently published another one.

Let me end this interview by asking

you about your professional future: do you see yourself more as a writer or as President of the European Commission?

My latest book, Dans ce clair-obscur surgissent les monstres (Plon), is an essay on the experiences of a leftwing government in France and the unforeseeable challenges facing the left in Europe today. Therefore, as you can see, there’s no incompatibility between writing and remaining in office. In fact, expressing my ideas on paper helps me to focus on my work objectives, especially in a job like mine, in which I have to put out fires almost every day. Therefore, as regards my professional future, I can confirm that I have no intention of retiring when my mandate as a Commissioner expires next year.

But, for the time being, it’s too early to speculate about future positions.

The battle I’m interested in right now is that of ideas. What I do know is that, one way or another, I want to continue serving the European project, my country, France and my political family, the Social Democratic Left. How? That’s a question for tomorrow, not for today.

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Special report: Ethical banking and banking on values

Ethical banking

is making inroads in Europe

Text: Esther Herrera

The renaissance of ethical banking in the European Union took shape in the wake of the economic crisis. Although there were precedents in some countries in the middle and north of the continent, the states most affected by the sovereign debt crisis and sub-prime mortgages - those in the south became aware that other forms of finance existed too.

The pioneering countries in which social and ethical banking have been most deep-rooted in historical terms are the Netherlands and England, according to Economists Without Borders. Other states around Europe, however, have followed their example in recent times, such as Italy, which passed the Law on Ethical Finance just over a year ago, laying down the six basic principles of ethical banking, including transparency and banks being unable to have offices in tax havens. Curiously, the Banca Monte dei Paschi di Sienna, the oldest bank in the world, is Italian and was recently bailed out as the result of an agreement between European institutions and the Italian Government, given that, according to the European Commission, the bank had sold dubious loans in a “generalized and systematic” manner, deceiving thousands of citizens.

Unethical methods have no place in social banking, which is why this movement hopes to achieve ever greater prominence

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throughout Europe. At the end of 2017, Robert Gualteri, Chair of the Committee on Economic and Monetary Affairs, headed a high-level conference in the European Parliament addressing the importance of ethical finances and why the EU should promote them. The meeting also served to introduce the subject of how to promote and enhance the importance of what is known as “green finance” (whereby these types of banks also finance projects designed to improve the environment and fight against climate change). The European Federation of Ethical and Alternative Banks (French acronym: FEBEA) is an organization based in Brussels which defends social banking. Although its members admit that they have business models which are sometimes complicated [in comparison with those of traditional banking], they share the same objective, that of financing projects in the real economy which provide an added environmental or social value. Although the organization also acknowledg-

The pioneering countries in which social and ethical banking have been more deep-rooted in historical terms are the Netherlands and England, according to Economists Without Borders. Other states in Europe such as Italy have followed their example in recent times es that ethical banking is still a “tiny” segment of the whole financial banking system, it also points out that the sector is growing as a “prophetic minority” of what the future of the financial markets may hold.

Special report: Ethical banking and banking on values LIMITED PRESENCE ON THE EUROPEAN AGENDA However, there is little mention of social banking on the EU’s political and economic agenda. MEPs like Patrizia Toia and Silvia Costa, both of them Italian, are among the few to have raised their voices in support of this kind of finance having a greater presence. In fact, the European Commission has barely said anything on the issue, although it has mentioned the improvement in the transparency of traditional banking, whose means of making profits are much more obscure. As for the FEBEA, in its latest report on ethical banking practices it explains that almost 90% of the members of the organization apply tools to verify the origin of their funds and conduct detailed transparency studies on the assignment of their banking assets.

Ethical banking has also been a pioneer in including a ban on investment in tax havens among its

conditions, long before the European Union decided to approve a list of what it calls “non-cooperative jurisdictions in fiscal matters”, on which it included 17 countries it regarded as such, including Panama, Tunisia, Barbados and South Korea. Brussels hopes that this list will pressure the states to change their legislation; if they don’t do so, sanctions will be applied to them, such as not being able to access European development funds, increased surveillance of their financial operations and increasing the number of audits on taxpayers who benefit from these tax systems. However, the list became considerably shorter at the beginning of January, when nine of the initial seventeen countries were removed. Pierre Moscovici, the Commissioner for Economic and Financial Affairs, is one of the strongest supporters of the list, although he has warned that this “is not the end” of the surveillance of these types of systems.

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At the end of 2017, Robert Gualteri, Chair of the Committee on Economic and Monetary Affairs, headed a highlevel conference in the European Parliament addressing the importance of ethical finances and why the EU should promote them.

The meeting also served to introduce the subject of how to promote and enhance the importance of what is known as “green finance”

THE ABC OF ETHICAL BANKING IN THE EU • Where is it most deep-rooted? In the central and northern European countries, especially the United Kingdom and the Netherlands. Movements emerged as early as the 1980s and 1990s which would later be linked to social and ethical banking, together with new values such as responsible consumption, care for the environment and social concern.

• Which was the first ethical bank? ASN Bank (in the early 1960s in the Netherlands), followed by Triodos in 1980. In England, the most important ethical bank is the Cooperative Bank, which came into being in the early 1990s.

• How has the movement spread? The recent economic crisis has helped ethical banking to spread to other countries and to extend to the southern European countries. For example, it currently has broad acceptance in Italy, although savings banks, which have historically encouraged social causes and investment in projects, are also regarded as having an ethical component (they already existed in southern countries such as Spain or, again, Italy).

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Special report: Ethical banking and banking on values

Conventional banking versus ethical banking: The financial crisis that erupted in 2008 has revolutionized the banking sector. The bad practices many entities performed led to the disappearance of several banks and some of those that have survived are now facing credibility issues.

The Grayling Report (2015), for example, highlights that 76% of people do not trust banks. This explains why most banks today have made very important changes in their values and practices. However, there is still a growing part of the population that demands new values that affect the objectives and banking products. For example, there is a growing interest in issues relating to sustainability, mainly due to the wave of information about the problems the world is currently facing. According to Forética (2016), six out of 10 consumers say that if they had to choose between two products with similar characteristics, they would always choose the most sustainable, even if it is more expensive. These are factors that explain the growing interest in ethical banking.

VALUES AND PROFITABILITY Ethical banking, in accordance with the principles of the Global Alliance for Banking on Values (GABV), is inspired by values such as the following:

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• Sustainability and society: benefits should be achieved through activities that benefit the environment and society. Therefore, the aim is people and sustainability, and profitability is only a way and not the ultimate goal. Conventional banks, on the other hand, use money to maximize financial profitability.

• Real economy: money should be used to improve real economy, not financial speculation.

• Transparency: it is necessary to inform clients and investors so that they know exactly what their

money is invested in.

The application of these values can lead to a loss of profitability.

In fact, while conventional banks can achieve a profitability of up to two digits in the expansive financial periods and accumulate large losses in periods of recession, ethical banking can guarantee between 4% and 8% of stable profitability, both in expansive and recessionary periods.

MAIN LEVERS OF SUCCESS Next, we analyse the main levers that explain the important growth that banking on values is experiencing:

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Levers of success in banking on values ORIOL AMAT. Senior lecturer at UPF, economist and president of ACCID. Fellow of RAED.

In ethical banks, there are no bonuses (variable remunerations) or extremely high salaries.

The salary range (difference between the lowest and the highest wage) is usually between 1 and 10, while in conventional banks this range goes from 1 to 600 or more

• Financial products that promote a better world: the bank invests in loans and investment funds for initiatives related to renewable energies, microfinance or fair trade. Therefore, it does not invest in companies with interests in sectors such as betting, weapons, nuclear energy, genetic engineering or intensive agriculture.

Nor does it include companies that violate workers’ rights or human rights, as well as those that are involved in cases of corruption.

• Lower risk of financial products: while conventional banks invest in complex financial instruments and in certain tax havens where there are no information requirements, ethical banking abstains from this. Ethical banks prefer lower risk operations and invest in companies that have a positive impact on the real economy.

• Loan evaluation: a conventional bank grants a loan when the client has favourable solvency, guarantees and repayment capacity. In the case of ethical banking, it is also essential to lend money to companies related to the environment, culture and society. Therefore, in addition to the solvency of the client and the viability of his/ her project, it is imperative that the money is lent to projects consistent with the bank’s values (sustainability, real economy ...).

• Policy with the people who work in the bank: staff selection is made keeping in mind that the values of the person are in line with those of the bank.

Human resource practices must be consistent with values. Thus, in ethical banks, there are no bonuses (variable remunerations) or extremely high salaries. The salary range (difference between the

lowest and the highest wage) is usually between 1 and 10, while in conventional banks this range goes from 1 to 600 or more.

• Transparency and CSR model: the level of transparency is another differential factor. In ethical banks, customers are informed of the destination of their money so that the customer knows where it is going to end up.

Levers like these demonstrate that over the years banks with values have experienced very important growth throughout the whole world. It also important to bear in mind that their weight remains low and, therefore, they still have room to grow, due to a growing clientele who demand their products and approaches.

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Lending and risk in values-based banking: What role does social capital play?

Last April, Carlos was at a crossroads. The 52-year-old had overcome drug addiction and was working as an addictions support worker when he received a court letter demanding he repay the bank he’d defrauded, or face returning to prison.

Carlos had graduated from an addictions recovery program through an organization called Hope4Freedom, which later employed him to help other men struggling with addiction.

Carlos (who lives in British Columbia, Canada) didn’t want to return to prison, but didn’t have the $7,000 that would determine his future. He also knew no bank would lend him money.

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Financial institutions in North America traditionally lend clients money based on a credit score ranging from 300 to 850 points. This score assesses whether a person can repay the loan and is determined solely by financial performance. Higher scores are better; the number fluctuates based on factors such as income, timely loan payments and debt load.

For most lenders, Carlos was too high a risk.

GOOD REPUTATION IS BANKABLE But what Carlos did have was a good reputation: what we call social capital. The organization we work for (Vancouver City Savings Credit Union, known as Vancity) didn’t know him, but Hope4Freedom is a trusted community partner, and their executive director spoke to Carlos’ character as an employee, his commitment and reliability. He told us he had “no doubt” Carlos would repay the loan. To Vancity, Carlo’s social capital was bankable.

Vancity is a values-based financial co-operative serving the needs of more than 523,000 member-owners and communities in British Columbia. With $25.6 billion in assets plus assets under administration, we are Canada’s largest community credit union. This means we use our assets to improve the financial

well-being of members while helping build healthy communities that are socially, economically and environmentally sustainable.

This triple bottom line drives our business model and decision-making.

Our annual reports disclose results across a broad set of measures demonstrating the impact our business model is creating within these spheres. Currently, over 21% of our assets under administration are in triple-bottom-line assets. For example, since 2009, Vancity has funded investments of more than $350 million to support affordable housing in B.C. By 2020, our goal is to increase triple-bottom-line assets under administration to 50%.

The following lending programs are examples of how we’re achieving this: 1) The Vancity Fair & Fast Loan™ is a small-credit alternative to payday loans, can build credit history and offer more flexible eligibility criteria than conventional loans. Vancity is one of the first Canadian financial institutions to offer an alternative to payday loans.

If a member borrowed $300 for the minimum two-month term and paid it off after two weeks, it would cost about $2.20 (19% annual percentage rate or APR), compared with payday

Special report: Ethical banking and banking on values

DARREN FAIRBROTHER. VP of Enterprise Risk Management at Vancity.

SUSAN MOHAMMAD. Marketing and Communications consultant at Vancity.

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LESLIE SIMS. Senior Credit Initiatives consultant at Vancity.

Vancity lent Carlos $9,200 to pay his court order plus a small credit card balance. He has never missed a payment and has since started a handyman business, and has a business line of credit with us lenders, who at the time we launched, charged up to $69 to borrow $300 for two weeks (a 599.64% APR).

British Columbians were using payday loans at a higher rate (per capita) than residents of other provinces.

From 2012-2014, the number of payday loan borrowers grew by 58%.

Vancity believed there were significant risks to our community if we did not provide an affordable alternative to help prevent people from getting stuck in a cycle of debt. Three years after launching, we’ve saved members $11 million in interest and fees.

Delinquency rates are lower than the payday loan industry, and consistently lower than a comparable Vancity loan portfolio using conventional eligibility criteria.

2) Our Creative Credit pilot program, started in 2015, is an experiment to learn about our members’ unmet credit needs. We learned that sometimes policies and procedures restricted us from providing the right credit solutions.

We began testing alternative credit adjudication measures for members who may have been excluded from borrowing due to income or credit score.

Over 40% of the loans in this portfolio include social capital to strengthen the application. Remarkably, none of these loans are in default.

When evaluating the risk of giving Carlos a loan under this pro-

gram we asked, what is the community cost of not helping him?

Carlos was helping hundreds of people on their recovery journey. If he returned to jail, we would have lost that community benefit. Therefore, Vancity lent Carlos $9,200 to pay his court order plus a small credit card balance. He has never missed a payment and has since started a handyman business, and has a business line of credit with us.

Our ability to lend to people like Carlos based on non-financial factors lowers risk, which will create more stability for us all in the longterm.

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Special report: Ethical banking and banking on values

People management in sustainable banking When we present values-based banking to our students, we usually get two reactions. The first is surprise that these banks exist. The second is confidence that they will lose their mission to the profit motive in the long run. There is some truth to that.

Values-based banks, are under incredible pressure to standardize, increase efficiency, and move away from the particularities of place and context. This is incompatible with diving deep into the needs of marginalized communities and emerging sectors, such as renewable energy.

In order to maintain the mission against these pressures, it must live day to day in the people

who work at the bank and how they are managed. After working for years with human resource managers from banks around the world, there are two key lessons we’d like to highlight here. The first is that the mission is not just a static, abstract idea. As one HR manager said: integrating values is a daily practice. Just as technical skills evolve and expand over time, so can the skills that the mission requires. For example, values-based bankers are often asked to consider both financial and qualitative data in making a decision about a loan. Doing this well requires nuanced analysis and judgment, not checklists. This is a skill that can be taught and nurtured by the bank.

Values-based bankers are often asked to consider both financial and qualitative data in making a decision about a loan. Doing this well requires nuanced analysis and judgment, not checklists. This is a skill that can be taught and nurtured by the bank

HOW TO PROTECT THE MISSION OF VALUES-BASED BANKING?

1

INTEGRATING VALUES IN DAILY PRACTICE

2

RE-INVENTING HR PRACTICES

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HIRING, ONBOARDING, PERFORMANCE MANAGEMENT, COMPENSATION, AND OTHERS

Special report: Ethical banking and banking on values

LILLIAN STEPONAITIS. Just Money Program Fellow, MIT Community Innovators Lab.

DR. KATRIN KAEUFER. Senior Research Fellow, MIT Community Innovators Lab.

integrate values in the compensation scheme? The challenge is that that there are few examples for how to innovate people management in a mission-focused organization, meaning HR managers in values-based banks must be open to experimentation and change.

LEARNING FROM ALL

A FEW PRECEDENTS The second is that HR practices and policies must be reinvented to serve values-based banks effectively. Hiring, onboarding, performance management, compensation, and others all require reinvention. Bonus payments, for example: Can you rely on intrinsic motivation or should you

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There is no one best way to do values-based people management as the contexts differ so much around the world. A compensation scheme that is successful in the Netherlands may not be in the United States or Nepal. But there are lessons to be learned about these innovations across contexts and across cultures which is why we bring together leading experts from around the world to do just that.

Innovation in values-based banking, not just in people management, but in all areas of the business, benefits greatly from open sharing of successes, failures, and diverse visions for creating a more sustainable future.

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Special report: Ethical banking and banking on values

Stories of systemic change: BRAC Bank Values-based banking is basically about regeneration. By allocating their depositors’ money the right way, values-based banks contribute to create sustainable prosperity in the communities they serve, to foster inclusive finance thus creating opportunities for the unbanked and to regenerate the environment by financing those projects that are ecologically friendly.

More than just talking conceptually, the two stories below show how values-based banks approach regeneration.

bus ride to his weekly job in the cloth dying and sewing mill of a textile factory near Dhaka, the capital city of nine million people. Over many years, when he arrived at the factory, he had difficulty finding a place to stay, so he would seek shelter where ever possible, to avoid the heavy rains and get his nightly rest between his shifts. Today, thanks to his mobile telephone and his bKash mobile payment account provided by BRAC Bank, he can find a number of small accommodation houses and small companies providing services and food, all financed

by BRAC Bank.

tral bank taught us a different way of banking. He believed that banking could also contribute positively to the development of people’s lives and in turn would be important for the country.”

BRAC Bank was founded 16 years ago on 4 July 1991 to serve the small and medium enterprises of Bangladesh. Its founder Sir Fazle Hasan Abed had created the bank’s parent foundation, BRAC after a local civil war in 1971. Today it is the largest non-profit in the world, and provides 110 million people with primary education, essential health care, agricultural support, human rights and legal services, microfinance and enterprise development.

Selim Hussein, managing director & CEO of BRAC Bank, is proud when he travels through the towns and villages of Bangladesh: “Dr. Atir Ramin, the former head of the cen-

Six years ago, BRAC took the bold step to finance a subsidiary called bKash as a way to introduce mobile banking to Bangladeshis. Again, this was done with economic and

Each week, Hussein, a day worker living on the outskirts of Chitagong, Bangladesh, says goodbye to his family and begins a 120 kilometer

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Based on BRAC’s theory of economic and social development, BRAC Bank was created when it was recognized that there was a large segment of small businesses graduating from microcredit lending to small and medium size enterprise banking. This year 140,000 small and medium enterprises will bank at BRAC Bank.

BRAC BANK

Size in asset Number of clients Number of co-workers Geographical area covered Area of expertise in regenerative banking

$2,784,234,823 29,2 million clients 7,700 Bangladesh BRAC’s Microfinance Programme works to provide collateral-free financing to the poor, especially women, in both rural and urban areas, in a simple, efficient and affordable manner.

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A model approach to economic and social development TOM CUMMINGS. Executive Board and Senior Management adviser, a lecturer and the Director of Leading Ventures B.V.

The story of BRAC Bank’s subsidiary, bKash, is a story of putting innovation at the service of people in rural areas of Bangladesh, bringing opportunities to those that did not have them before. social development in mind, as only 15% of the population made use or had access to banking services, and 41% of the population (64 million people), by UNESCO standards were illiterate (more than the population of entire European countries).

With the explosive introduction of bKash, suddenly people and small enterprises who had no means to make payments or receive funds from relatives working abroad were ‘bankable’. bKash has lived up to its Bangla meaning “flowering transformation” as 28 million people and SMEs are now using bKash to conduct 40 million transactions daily.

INCLUSION AS A METHOD TO GROW Conscious of its social roots, BRAC Bank and its subsidiaries have had to make social inclusion an important part of their growth and success. In fact, BRAC has been the catalyst for an enormous amount of financial education in the country. “We have had to consider the rights of people, especially women, with every next step we make” describes Selim Hussein. “You cannot introduce mobile finance or mobile apps without taking into consideration the phones that people have access to use, or the ways in which money will be transferred and used in communities.” To broaden the impact of BRAC’s way of banking, eight years ago, they became a

founding member of the Global Alliance for Banking on Values (GABV).

Hussein, who joined the bank in November of 2015, was clear: “In March last year, I did not understand what the GABV was all about.

What I found and liked, were the principles of values-based banking - the words that stood behind the members of the alliance. I worked hard to disseminate and translate the principles in ways that were relevant for our bank. I realized that with few exceptions, people wanted to do the right things, the good things, and that people are proud of what we want to do.”

When Hussein was asked what his work in BRAC Bank means for him he was very honest: “I have been in the industry for 31 years.

For 25 years, I have worked for multinational foreign banks, who have a very different clientele. Up until that point, I had hardly travelled to the small towns and villages of my country. I now understand that BRAC’s kind of banking has a positive impact on families.

This has made me very, very proud to contribute to my country, and I am happy to see remarkable improvements in a such a short period of time.”

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Stories of systemic change: Tru-Cab

Trumann, Arkansas

Since its founding, the Southern Bancorp’s focus has always been the rural communities of the American MidSouth, primarily within the Arkansas and Mississippi Delta, one of the nation’s most economically distressed areas.

In the early 20th century, the small town of Trumann, Arkansas was known for being a lumber town founded by settlers who cleared the way for the St. Louis-San Francisco Railway. The large supply of lumber naturally attracted those companies that needed it, such as the Singer Company, which sought lumber to build the wood cabinets that housed their popular sewing machines.

The establishment of the factory in Trumann ushered in a new era for the community. With it came over 2,500 jobs, and with the jobs came shops, schools, churches, and restaurants.

For decades the company supported the town by creating city parks, medical services, a fire department, even water and electrical services. It was truly a blessing to have such a strong corporate citizen in their midst.

Of course, change is inevitable, and as has happened to countless other small towns, the Singer plant eventually closed its doors in the early 1980’s, leaving a very large hole in

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SOUTHERN BANCORP

Size in asset Number of clients Number of co-workers Geographical area covered Area of expertise in regenerative banking

$1,219,000,000 60,000 clients 375 Arkansas, Mississippi Southern concentrates efforts to increase individual net worth focus on three specific goals that help create a roadmap for success.

• Entrepreneurship • Housing • Savings

skills. By day he worked for Singer, and by night he tinkered in his wood shop, building cabinets for friends and family. It wasn’t long before those same friends and family convinced him that his hobby was worth so much more. the community. Yet even closed, the Singer plant still had a role to play in the town’s future.

MUCH MORE THAN A HOBBY During Singer’s heyday, a young man named Robert Heard worked at the factory building sewing machine cabinets and honing his wood working

He eventually left Singer and started his own company, Tru-Cab, which was a nod to both his community and his industry. It didn’t take long before Heard had outgrown his wood shop and moved into a 4,000-square foot building to accommodate his growing clientele.

After five years, Heard needed to

Special report: Ethical banking and banking on values

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Supporting real start-ups in the rural communities DAVID KORSLUND. GABV Senior Economist and Senior Adviser to the Executive Director.

The story of Southern Bancorp shows how trusting an individual’s determination and skills through supporting real start-ups systemically, the bank is contributing to bringing prosperity to areas in the Mississippi Delta area that were desolated by the effects of globalization, mechanization and offshoring grow and expand again, and with Southern Bancorp’s help, he was able to move into a building over twice the size of his original shop, bringing his total workforce to 20.

New markets and customers would require Tru-Cab to expand just two years later, again with financial help from Southern, to purchase new

equipment and another new facility to house the company’s growing workforce of over 70.

While the Heards were expanding their company, the Singer plant was closing its doors. The remaining complex sat vacant for some time as city leaders searched for a new owner to fill the void, yet none arrived. Finally, a group of local businessmen purchased the empty factory and created a subdivided industrial park to attract smaller operations and create jobs.

Yet even with some tenants in place, the largest manufacturing space sat empty. That is, until now.

The man who once built sewing machine cabinets in that large manufacturing space has now, decades later, moved his nationally recognized company into the very space in which he once worked fifty years prior.

Tru-Cab’s new facility occupies nearly 60,000 square feet of manufacturing and job creating potential. And while it will never replace what the Singer Company once provided this town, it is evidence of the transformative nature that both determination, willpower, and a strong community financial partner can make in both an employer and a community’s life.

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Special report: Ethical banking and banking on values

Strengths • We are faced with a strongly expanding movement, with a presence in six continents where certain banks from all over the world are finding the actions more appealing. We are referring to a diverse group of banks in terms of their geographical location, ownership and governing model or business focus, but all come together thanks to the shared principles that they put into practice. We are talking about a group of healthy banks that positively contribute to society and are financially sound.

• We are not just talking about any association, but a movement with clear principles agreed by the chief executives of each member bank that, without a doubt, identify what we are talking about when we refer

to banking on values. The Kathmandu commitment identifies the ambition and objectives of the social and environmental impact that each GABV bank aims to achieve, as well as the reasons why they are set. The six principles of banking on values include how and with which criteria banking is carried out at the alliance’s banks. In addition, the Berlin Declaration identifies what the GABV requests from the banking sector, regulators and politicians in order to progress with the banking model so it becomes part of the solution to world issues and not another problem.

• The principles of banking on values are easily measurable through KPIs and the GABV has developed a complete metric and strategic

analysis tool, namely, the GABV Scorecard to clarify which banks qualify as a member of the alliance.

This tool allows banks to measure in depth the alignment of any bank which shares the principles of banking on values and, in addition, allows any bank to begin the process of thinking about improving management, practices and culture in order to truly achieve a business model based on values.

• The resilience of the GABV banks is due to business models that prefer direct investment in the ‘real economy’ thus avoiding the pitfalls of many banks that focus on making money largely through trading and complex financial constructions.

Opportunities • Although to different degrees in different parts of the world, it can be observed that there is a growing awareness among the public regarding the need for greater transparency and ethical quality in business management and in banking especially. The public is becoming more and more demanding and, although in a timid manner, people are looking beyond the price-quality ratio when choosing their financial services provider.

• The obviousness of climate change and the effects of human activity on

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the environment are making many people in the most remote places of the world more aware of the issue.

The role that banking plays in contributing to healthier communities and a better planet is starting to become clearer. Through the alliance, GABV banks share responsibility for global issues while facilitating direct impact on the social, cultural and environmental transformation of regions and cities.

• The United Nations Sustainable Development Goals are a way of supporting a more human and

inclusive approach of the economy and it should also have an influence on the financial system.

• The current post-crisis regulatory cycle is coming to an end and the current over-regulation will have to be substituted by a more creative regulatory and supervising system that combines elements to protect the health and stability of the financial system alongside other elements that guarantee sensible investments. In this sense, the GABV banks could have a great deal to contribute.

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Weaknesses • The average size of member banks in the alliance is relatively small with regards to the volume of managed assets, although some banks are very important with respect to the number of clients and the significant social and environmental impact generated in their influence areas.

• This average size means there is less investment ability in fields such as external communication, therefore the concept of banking on values (also known as ethical

banking, sustainable banking or regenerative banking) is relatively unknown, especially in certain countries.

• This low visibility is also seen in relationships with regulating authorities who do not know much about the positive social impact of the GABV banks. These authorities ensure all banks are subject to regulatory rigour without considering that, by applying the principles of banking on values, the GABV banks normally have fewer

risks and comparable financial results to most traditional banks.

• At times it can be observed that there is a lack of ambition in some GABV banks regarding a more determined growth with the aim of increasing their influence and positive impact in their communities.

Threats • Intrusion from the large traditional banks, who when trying to clean up their image, are copying the messages of banking on values in their communication policies, however they obviously are not putting this kind of banking into practice.

• Clarifying to the public what a banking on values bank is like, compared to any other type of

bank, is an essential element for clients to freely choose which bank they prefer to operate in.

There is a risk that consumers and productive businesses do not realise how their financial choices can contribute to the welfare and well-being of a city or region.

• The position of regulatory authorities in some parts of the world, which are against having a rich

and diverse banking system, support consolidation and size as the only guarantee to provide a solid system. Also political positions in some countries which stand for denialism with regard to the issue of climate change and opinions which make the neo-capitalist paradigms more classic.

DR. MARCOS EGUIGUREN HUERTA. Executive Director of the Global Alliance for Banking on Values. Professor at the Polytechnic University of Catalonia and co-founder of SingularNet.

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Special report: Ethical banking and banking on values

Interview with

Peter Blom CEO of Triodos Bank

Text: Emma Bouisset

Photos: Triodos Bank

A staunch defender of a banking model committed to people and the planet for over 30 years, Peter Blom believes that by making good use of money it is possible to change the world. He explains how in this interview, in which he reveals how the more humane side of the world of finance works.

S

ince its creation, Triodos Bank has always argued that profit is not its priority and that what it seeks to achieve is a “real impact, changing the world through money, a change achieved with people”. Having led this institution as CEO for 20 years, do you still think it is possible? In other words, can a bank operate in keeping with these principles?

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Yes, it can. And the proof lies in the fact that, throughout these years, we’ve achieved significant growth.

Growing for us means having an impact on or financing an evergrowing number of companies and institutions promoting sustainability. So I think it’s absolutely possible. In fact, in my opinion, focusing solely on making short-term profits

is dangerous. Profits are a result, not a prior condition. However, this doesn’t mean it isn’t important whether a bank achieves a profit or not. Achieving the most stable profit possible should form part of the bank’s proposal, because profits are important, but it should be a condition that it works on, not the main objective.

Special report: Ethical banking on values MUNDOMUNDO EMPRESARIAL En Portada Medicinaandde banking Vanguardia Desde Bruselas GLOBAL

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“A BANK IS NOT AN ORDINARY BUSINESS”

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“Since the crisis, we’ve all realized that forming part of a financial system makes us vulnerable”

Actually, the figures show you’re right. In just under four years, Triodos Bank has practically doubled the number of accounts and customer deposits it manages (they rose respectively from 454,927 to 759,738 and from 4,594 to 8,025 between 2012 and 2016). Which factors do you think explain the growing interest of citizens in this new sustainable banking model?

Since the crisis, I think we’ve all realized that forming part of a financial system makes us vulnerable. Besides this, banks play a vital role, and if they’re not wellorganized they can also become vulnerable. So there is greater awareness of how the economy is organized and the fact that we have to handle it with much more respect, something that dovetails perfectly with our position.

Conventional institutions seem to have taken good note of the feelings of the citizens and we’re seeing these entities move closer to your business model, with campaigns appealing to empathy and dialogue with their customers. What do you think of this trend? Do you think we’re really witnessing the emergence of a more humane type of finance?

We hope this is the case, although I’m not convinced yet. What I do see is that there’s a generation of

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young bankers from other institutions who also argue that banking should be something more than boards of directors generating money with money. So I think it’s a very positive trend. However, it’s also clear that many of the initiatives for a green and sustainable economy arranged by these banks are advertised with major marketing campaigns, and it would be really interesting to see not only this 1% that they have in “green” activities but also the 99% that isn’t sustainable yet and for which they bear a responsibility. So, a true period of transition is opening up for them, and I think we and they should be very honest about it. Although I understand that this change (which must take place over the next five to ten years) can’t be achieved overnight, I think they should take it very, very, seriously.

Defending a sustainable banking model for 20 years, practically alone and against the tide, can’t have been easy. How do you lead an institution like this? What arguments and incentives motivate your team?

We’ve never paid bonuses. That’s something that’s never been discussed financially. The people who work at Triodos Bank do so because they like the meaning of their work, its importance society, because it’s meaningful work. And that doesn’t happen only at Triodos Bank. The younger generations prefer to work in jobs that are meaningful, not just in well-paid jobs. In this regard, Triodos Bank has competed at an advantage over the last ten to twenty years, and I think it’ll keep on doing so in the future, as we offer work that contributes to society in a sustainable way. And not only from an ecological and people-oriented point of view,

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For the CEO of Triodos Bank, the greatest risk facing humanity today is climate change and, above all, “its consequences for people”. For this reason, Blom believes that the time has come for “the financial world to take a step forward” and work towards the creation of a “solid real economy”, with initiatives making it possible to finance the transition towards a more sustainable society. Because, according to him, “the financial industry can really help change the economy”.

but also in a financially sustainable way. We offer our workers the chance to do something they really want to do. And that makes a big difference.

Is having a relatively simple management structure perhaps one of the strengths of Triodos Bank?

Well, I’d put it another way; one of our strengths is that we have a very coherent and solid value base. As a European bank, working in an international environment is complicated; we’re Europe and different nationalities at the same time. So sharing the same values is a great help to us.

On the other hand, surely you’ve had to make difficult decisions on more

than one occasion. Which ones would you highlight? Would you make them again?

Sure, I’ve had to make many difficult decisions. But I think those that pose the greatest challenge are the ones related to people.

To form part of Triodos Bank you have to be a good banking professional and, at the same time, be perfectly aligned with our values; this is crucial and, also, a relatively new thing. There are highly professional bankers who don’t understand our values. And the other way round; people who are really enthusiastic about the values but who don’t manage to become true bankers. Although it’s not easy, because their intentions are very positive, you have

to ask them to leave because they can’t work at Triodos Bank. In my opinion, this is one of the hardest decisions, but it has to be done.

Do you think the loss of the connection between money and the real economy is the greatest risk to our society today?

I wouldn’t put it like that. I think the greatest risk today is climate change and, in this regard, especially its consequences for people.

I think bankers have always kept their distance from this issue.

They’ve sat behind their screens to watch the movements of the market. Now, however, it’s very important for the financial world to take a step forward and create a solid real economy for the coming

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“Of course, banking is almost impossible without trust, but the most important value for a banker must be the vocation to support people in becoming entrepreneurs and developing in a sustainable way”

decades, taking into account the major challenges climate change and the reduction of biodiversity entail for our society. And the financial industry can really help to change the economy. Banks can help by assigning money in the right direction, making it possible to finance the transition towards

a more sustainable society. Because if the financial industry doesn’t do this , I think we’ll really endanger the planet’s future and that of people too. We have a great responsibility.

Is trust the most important value in banking?

I’d say trust is a result of it. Of course, banking is almost impossible without trust, but the most important value for a banker must be the vocation to support people in becoming entrepreneurs and developing in a sustainable way.

The result, if you act accordingly, with 100% effort and with com-

THE 6 PRINCIPLES OF ETHICAL BANKING

1

PEOPLE, PLANET, PROFIT

2

REAL ECONOMY

3

LONG-LASTING RELATIONSHIPS

4

SUSTAINABILITY

5

TRANSPARENCY

6

BUSINESS CULTURE

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plete transparency, is trust. In the case of Triodos Bank, I’d say that our 700,000 customers trust us because they see what we do and what we really believe in; it’s not just a matter of marketing.

should be much clearer about what kind of role they want to play in society, and then we can tackle the current level of regulation, because regulation is ultimately only a form of contract.

You claim that “we can learn from a crash or a crisis”. What lessons have you learnt from the last one?

Well, as I mentioned above, I think we’ve all learnt that banks have to be monitored, transparent and with a real purpose beyond simply making money. It’s very important for today’s banks to express in their own words how they’d like to contribute to the development of society. So, from the crisis, I think we’ve learnt that a bank is not an ordinary business. A bank lies half-way between public and private; if things go wrong, they don’t disappear, governments help them, because they are of public interest. But we don’t want all banks to become state-owned either. What we want is for them to be close to the real economy, to the needs of entrepreneurs. Therefore, there’s an intermediate role for banks to play, and I think we’ve all become much more aware that it exists and we’ve learnt a lot more about what that means. It means better capitalization. It means being more transparent. And that also means more regulation.

However, I sometimes think regulation is presented as the answer to everything, and I have my doubts as to whether this is really the case. I think it’s much more important for us to balance more regulation with more purpose. Banks

At Triodos Bank, and I quote your words, you “believe in a real long-term approach”. Could you tell me what your future expectations are for the next five to ten years?

I think Triodos Bank will become an even bigger movement. We are currently 700,000 people and the number of those who know us, in addition to our customers, is increasing year after year.

So I think the movement will grow over the next five to ten years. What I mean by that is that we’re very close: we help people to manage their money more carefully. At present, chiefly through investments, payments, savings and loans. I think we’ll have more activities in the future, maybe pensions.

These are my future expectations: an ever closer and more intense relationship with our stakeholders and customers.

And, you, personally, where do you see yourself ten years from now?

I’m 61 years old, so I wouldn’t bet on still being CEO of Triodos Bank in ten years’ time. I think there’s a new generation of wonderful people who’ll be heading the bank by then. In fact, I suppose that’s already happening in a way. But sustainable banking, value-based banking, is my life, so, albeit to a lesser extent, I’ll remain attached, so it’s not something to worry about.

A CAREER PROMOTING SUSTAINABILITY

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Dutchman Peter Blom (1956) began working at Triodos Bank in 1980, the year it was founded, and in 1989 he joined its Board of Directors. In 1997 he took over as CEO of this European banking institution, whose purpose is to achieve a positive change through money. Triodos Bank engages in a more humane and transparent form of banking, in which the social benefits play as big a part in the decision-making as the more traditional factors of risk and performance. Blom is also the Chairman of the Board of Directors of the Global Alliance for Banking on Values, a member of the Board of Directors of the Dutch Banking Association and Joint Chairman of the Board of the Sustainable Finance Lab. In August 2017 he was also appointed a new member of the Central Planning Committee of the CPB (Netherlands Bureau for Economic Policy Analysis).

Peter Blom’s ADVICE: “Look towards the future and form part of the solution. Not just because you’re more likely to be successful, but because forming part of something positive will ultimately give you much more positive energy.

This has always motivated me. And that’s where we have to go. ”

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Governance models in banking on values: Inspiration and principles

The motto of the Global Alliance for Banking on Values (GABV) is exemplary of the way values-based banks think and motivate growth today: “Thinking people before profit.” They differentiate from both conventional high street banks and non-profit development organizations by their objective to bring positive change into social and ecological systems through the income earned in commercial markets. They aim to not simply generate profit without harming the environment and negatively affecting their communities, but to generate positive change and create the rising tide that raises all boats.

Values-based banks prioritize their missions over short-term monetary opportunities and measure the effectiveness of their governance by its ability to support and sustain the achievement of the organizational mission. Based on the principles of sustainable banking, a values-based approach incorporates governance mechanisms, whose history can be traced back to the cooperatives of Renaissance Europe, when guilds and craft unions began to ally themselves to promote trade and maximize locally available labour forces.

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Values-based banks represent various ownership and governance models, such as credit unions or co-operative banks, building societies, microfinance institutions, development banks, etc. They also operate in different institutional and economic contexts that could enable or constrain the way they approach and apply the values-based banking model. Nevertheless, the majority of the GABV members share a set of governance principles that allow them to realize sustainable growth for all goals and a fairer version of prosperity, and provide their members with much more inclusive banking services. Some of the characteristics of values-based governance are highlighted below.

• Voluntary and open membership. Values-based banks aim to decrease financial exclusion, typically experienced by vulnerable social groups and micro businesses. The appeal of the values-based model lies in its ability to counteract the current financial market logic designed to benefit the strong players at the expense of the disadvantaged majority. Their banking approach based on innovative credit mechanisms and alternative guarantee systems, allows values-driven

banks to put money into projects and persons typically left overlooked by conventional banks. Thus, the First MicroFinance Bank (Tajikistan) puts its efforts into developing rural and semi-rural areas where the concentration of the poor is the highest in Tajikistan and SAC Apoyo Integral (El Salvador) supports sectors typically excluded from the local economy, such as female family heads, rural workspaces and informal low-income markets.

• Autonomy and independence. Values-based banks are independent, self-sustained organizations resilient to outside disruptions. A high degree of autonomy allows them to organize governance in alternative ways to prioritize ethical matters that are more deeply grounded in these institutions and captured in much more detailed and sophisticated structures. For example, in Affinity Credit Union (Canada) three distinctive Board Standing Committees have been formed by board directors to address ethics of business related topics. The Conduct Review Committee is responsible for overseeing conduct and ethical business standards.

The Co-op Principles and Traditions Committee ensures that Affinity’s

Special report: Ethical banking and banking on values

Unlike many High Street banks and investment funds that compete for customers through short-term financial gains offers, values-based banks intentionally restrain from short-term profit optimization and attract members that are willing to support the bank in the long run cooperative values and traditions remain healthy and robust. Finally, the Corporate Social Responsibility Committee works on researching and recommending corporate social responsibility policies to the board of directors.

• Member economic participation. Values-based banks’ members contribute to the capital

KENNETH AMAESHI. Chair in Business and Sustainable Development and Director of the Sustainable Business Initiative at the University of Edinburgh Business School.

of their organization, providing it with money to be channelled for community development and benefit goals. Values-based banks incorporate customers as beneficiaries breaking the well-known capitalist dichotomy between owners and stakeholders. They aim to channel deposits received from their community members into loans for other members in need of extra finance – families, businesses and community organizations. For instance, in 2016 Vancity credit union (Canada) provided 6,881 people with access to basic banking services and funded 2,124 units of affordable housing. Overall, 21% of their capital was specifically invested in building healthy communities.

• Democratic member control. Values-based banks build their models on high levels of community involvement in organizational governance. They are predominantly governed through democratically elected boards of directors that take leadership in strategic management and ethics monitoring.

Values-based banks take creative approaches to developing unique innovative solutions to strengthen their communitarian instinct. For example, members of Ekobanken

•… put money into projects and people typically left overlooked by conventional banks.

•… organize governance in alternative ways to prioritize ethical matters.

VALUES-BASED BANKS…

ANASTASIA NARANOVA. Doctoral researcher in the Strategy group at the University of Edinburgh Business School.

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•… incorporate customers as beneficiaries breaking the well-known capitalist dichotomy between owners and stakeholders.

•… pay increased attention to developing their members, representatives, managers and employees and creating the best talent pool.

•… work for the sustainable development of the communities in which they operate through policies and practices approved by their members.

•… work in close collaboration with local, regional, national and global institutions that support similar goals of financial inclusion, responsible investment and sustainable growth.

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Special report: Ethical banking and banking on values (Sweden) elect a board of representatives and an Election Committee.

The board of representatives elects the board of directors. Each share gives the right to one vote at the general meeting, and even though members could own more shares, no-one may have more than 10% of the votes.

• Education and training. Values-based banks pay increased attention to developing their members, representatives, managers and employees and creating the best talent pool. For instance, Triodos Bank (Europe) provides its co-workers with an opportunity to participate in courses and seminars on management development and visionary leadership organized as part of the Triodos Academy initiative. They also include “values seminars” for co-workers who are relatively new to Triodos Bank, which focus on the development of social, natural, human and non-financial capital.

• Concern for community.

Values-based banks work for the sustainable development of the communities in which they operate through policies and practices approved by their members. Unlike many high street banks and investment funds that compete for customers through short-term financial gains offers, values-based banks intentionally restrain from short-term profit optimization and attract members that are willing to support the bank in the long run. Among other criteria, they indeed report on profitability but, not profit maximization.

Teachers Mutual Bank Ltd (Australia) formally reports on its environmental, social and governance performance against 95 key performance indicators and targets. In 2016, this approach allowed the bank to invest 4.73% of net pre-tax profits

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into community initiatives, which is four times the London Benchmarking Group international average, and fifteen times the Australia and New Zealand finance sector average.

• Growth and development through cooperation. Values-based banks work in close collaboration with local, regional, national and global institutions that support similar goals of financial inclusion, responsible investment and sustainable growth. They are open to peer learning and best practice sharing that could promote responsible banking approach and help turn values-based banking into a mainstream model. For instance, Beneficial State Bank (USA) partners with mission aligned businesses and non-profit organizations across various industries to build an ecosystem that will support its mission of delivering fair transparent financial products and services.

BEYOND BORDERS Employing these governance principles allows values-based banks to function in a much more inclusive manner, encourage informed involvement of a larger circle of community members and leverage their knowledge for mutual success and growth under the growing pressure of regulatory requirements. Even though an increasing number of high street banks are attempting to implement elements of a values-based banking approach, the majority of them are missing the underlying commitment to sustainable financial practices that makes these principles matter across geographies and national boundaries. While high street banks keep proving that no one is too big to fail, small steps of informed communities seem increasingly believable to bring positive change to financial system.