How Ethical is your Bank?

By Julia Koskella

DISCLAIMER: this article is asking you to DO something. We’ll help you do it, do it with you, inspire and empower you as you do it… but it’s more than an online article, it’s a DO.  If you bank with one of the big high street banks then and don’t mind DOING things, read on…

We care about the people in our communities. About social justice, inequality and sustainability. And we all do actions to make a difference. Some of us volunteer for hours every week.  Lots of people give what they can to charity. I struggle daily to reduce my carbon footprint: sweating my way to work on a bike, salivating past steakhouses, clutching my groceries in my bare arms when I forget to bring that hemp bag to the corner shop.

Dissatisfied customer cuts up his bank card outside Barclays

Some of the things we do for social justice are tough.  But there’s one easy thing lots of us don’t do: bank with financial institutions we’re proud of. And it’s an action that has huge power to create change.

People in the UK see banking as an unavoidable evil. We open our accounts when we’re young and are more likely to get divorced than to switch provider. We aren’t often aware of the alternatives (the UK’s 500+ credit unions are sadly under-publicized) and the financial system seems too huge to take on, even when we are so frustrated by its failings.

A campaign launched this month, Move Your Money, aims to change that fact throughout the UK. It shows us an alternative vision: we are each influential participants in the financial system.  We can create better banking by choosing mutually owned, community-focused and ethically minded banks.

On a practical level, the website MoveYourMoney.org.uk  is a great resource to help you make the move, which could be just what you need if you’ve been putting off switching.  You can read what’s wrong with your particular bank, get accessible information on what alternatives to choose from, and use the website as a how-to guide to easily make the change.  It’s a one-stop-shop, so take a look and pledge to move your money.

Better banking alternatives already exist in the UK: ethical banks, building societies and credit unions. Move Your Money sees mutually-owned banking structures (including building societies, credit unions and banks like the Co-operative) as a key part of the solution.

This is of particular relevance for this blog: mutual ownership is a social justice issue. The big banks make their decisions and profits for shareholders. When we put our hard-earned money in their hands we are turning over huge amounts of power and supporting business as usual: money in the hands of the few. Bankers’ bonuses are one example of where our money is going, but the direction of money flow is institutionalized: the big banks make 341 pounds profit per second from their High Street customers. In contrast, banks that are mutually-owned make decisions for the interest of their customers, who are also the owners. This empowers vast numbers of people, distributes wealth throughout communities, keeps interest rates on loans lower and returns on savings higher, and brings banking back to its roots.

Secondly, there is a large sector of society that is financially excluded.  They cannot access bank accounts, let alone loans in an emergency. Credit unions allow many more people to be included.  They are mutually-owned institutions where members’ savings are pooled and then lent to members for emergencies or small businesses.  They still offer you interest and guarantee that your money is secure to the same level of High Street banks. But most importantly, you know that your money is making change happen locally, independently, and creating financial inclusion and security.

March is Move Your Money Month where we will be moving together to create change. Pledge to move your money now – you’ll receive helpful reminders up to your move date (it takes a few weeks for the banks to finalize your move) and you’ll be joining the movement for a stronger, more effective voice on the banking alternative.

Why your banking choice matters

Whenever I take out my HSBC card I see my role in perpetuating an unequal, unsustainable society. My big bank stands for all the things I don’t support: investing in arms, dictatorships, environmental destruction, bloated bonuses, financial crises, tax avoidance, staggering inequality of income, clinging on to “business as usual”. Your bank probably does too.

Your banking choice as an individual matters. When you choose to buy fair-trade coffee, your money gets used better once. But when you have money in a bank account, that money gets invested by the bank again and again. And it’s getting invested in lots things that go against social justice, from dictatorships to aggressive extraction of fossil fuels. In 2006 Platform’s report The Oil and Gas Bank calculated that RBS’ ‘embedded’ emissions were greater than the emissions of Scotland itself! Using one less plastic bag on my shopping trip has suddenly been put in perspective.

So I’m now putting my money in the hands of an organization I trust and like: my local credit union. I’m not doing it alone. I will be an important piece of the Move Your Money Movement. I’m using my consumer power to change the banking system for the better.

Moving your money is much easier than you think.  I’ve actually had fun doing it – a little systems-changing task that I have to do just once for a lifetime of impact. I got quite into choosing where I would invest my hard-earned cash, and then the paperwork itself made me feel empowered and just damn good.

So here comes the part where you stop reading, and go DO. First, pledge online on moveyourmoney.org.uk, as we’re stronger together. Then choose and sign up with your new provider. They will do most of the leg-work for the transfer process, swapping over your direct debits and answering any questions. If you can’t close your old account just yet (due to loans or overdrafts for example) then just open your new account and move what you can, where you can.

If you enjoy the empowering action as much as I do, then spread the effect by getting your friends and family to move too. My goal is to encourage 100 individuals to switch – an ambitious goal so I hope you’re on board!

The last word: this article is asking you to DO something, so go ahead: pledge to move your money this month.

www.moveyourmoney.org.uk  | www.facebook.com/moveyourmoneyuk | www.twitter.com/moveyourmoneyuk

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1 comment
  1. Charley said:

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