Lessons from Bank of Dave
THIS year has begun as last year ended, with ever more bank branch closures. Lloyds is shuttering a further 40 outlets across its networks, adding to 64 closures already unveiled by Barclays and spanishowned TsB.
The rapacious behaviour of high street banks, and diminishing service for all but the most well-heeled customers, is a source of fury some 15 years after the state-rescues in the great financial crisis.
The chasm that has opened between established banks, citizens and entrepreneurs is wonderfully illustrated by the British movie Bank Of Dave, now on Netflix .
it tells how a successful Burnley-based businessman, with deep ties in his local community, struggled to turn his interestfree loan offer to friends into a full service lender, Burnley savings & Loans.
Public service finance has a long history in Britain, exemplified by credit unions, building societies and co-operative banking. The guts were torn out of such structures by the greedy behaviour of former mutual lenders such as Newcastle-based Northern Rock.
heavy-handed regulation and capital requirements work against local start-ups. As with any fictional representation of true stories, the struggle of Dave Fishwick, the real Dave, against the ‘tossers’ in the City exaggerates hostile attitudes. Nevertheless, the narrative of Northern outsiders triumphing over obstacles in life, as in The Full Monty and Billy Elliot, has resonance in the age of the Red Wall and levelling up.
The production captures brilliantly the square Mile’s Oxbridge and public school dominated culture and the nexus of City grandees behind both the financial institutions and regulators. it shows how out of touch they are with ordinary punters. When the Financial Conduct Authority (FCA), for instance, acted against usurious behaviour by doorstep lenders in 2018, it drove some less well-off people into the hands of baseball bat-wielding loan sharks. City regulators would be mad to allow just any old business person to set up a bank without regulatory capital and scrutiny, however noble their record as lenders. Finance at all levels is blighted by the unscrupulous.
Barely a day passes when the Crown Prosecution service reveals how a financial adviser or local solicitor has been brought to justice after abusing client funds.
Moreover, the Bank of England and FCA have sought to encourage a new generation of challenger if not cottage industry banks.
starling, Metro, Atom, Monzo and Revolut provide different options. None of these addresses the idea of community, not-forprofit lending like Burnley savings & Loans. it is clear that banking doesn’t address local needs, especially in struggling towns and hamlets.
The warm glow of Bank Of Dave may be an outlier in its local and public purpose. But it dramatically illustrates a lacuna in UK finance.
Down stream
NETFLix is rapidly smartening up its model. Founder chairman Reed hastings may be stepping back but he leaves the streaming service in reasonable shape.
it is holding its own against the formidable challenges from streaming rivals such as Disney+, Paramount+ and niche players such as our own iTVx and holds 48pc of the market. it is seeking to turn more of its turnover into earnings through an advertising deal with Meta and is ending password sharing, requiring ‘guests’ to pay up.
Creative output has shrunk, with the spend down to $4bn in the latest quarter from $5.7bn on the same period of last year.
Quality doesn’t seem to have suffered. Entertaining ‘public service’ shows such as Madoff: The Monster Of Wall street and tennis documentary Break Point are upholding standards.
As Disney approaches its centenary on January 27, it is struggling with activist insurrections, boardroom turmoil and the challenge of building up streaming numbers. in contrast, upstart Netflix is getting its act back together although the shares are still 30pc below peak.
Shopping around
RECONCiLiNg the 1pc slippage in official December retail sales with the bumper results from the high street and grocers over the festive period is tricky.
The timing of the data differs and ONs figures are seasonally adjusted. Most critically, online shopping lost its lustre in 2022, with buyers flocking back to shopping centres and high streets, flattering numbers from M&s, JD sports and the like. Consumer habits can and do rapidly change.