Universal banking access
The identification of viable models for community-focused banking services, along with sustainable sources of capital and an appropriate regulatory framework.
According to the most recent statistics, two million adults in the UK do not have access to a transactional bank account (FRS 2005/06). One in nine of the poorest households do not have an account.
Access to affordable and fair transactional banking services that are responsive to the needs of low income consumers is the goal of financial inclusion interventions. Banking services need to be more inclusive to ensure that everyone who wishes to keep their money in a safe, accessible place can do so. However, we wish to establish the principle that access to transactional banking should be a right balanced by responsibilities.
This should not mean solely the use of retail banks for these services; we are committed to exploring alternatives.
An important lesson arising from our experience to date highlights the importance of relationships in relation to banking and other financial services (as demonstrated in the ARC Banking Matters to Me research project, for example). For low-income consumers, local services are even more paramount (as suggested in a Scottish Council Foundation rural financial inclusion and capability study, for example).
There are a number of questions being asked relating to banking and financial inclusion. These include:
- What might a “community bank” look like ? What kind of infrastructure would it need, who might it serve ?
- What role might the Post Office play in supporting financial services for the most vulnerable, given its place as a commercial company ?
- Should there be a universal banking obligation ?
- Are there viable alternatives to banks for transactional banking services ?
- What role might credit unions play in providing transactional banking in future ?
- Is there a “principles based” regulatory approach to redress the balance against low-income consumers ?
This is not an exhaustive list of the issues, however, and Trustees might also be interested in seeing proposals that address other areas under this outcome - whether relating to access to transactional services or to other banking functions.
Examples of what the Foundation might fund in pursuit of this outcome include:- banking-related campaigns; the development of business plans/ feasibility studies for alternatives; think pieces and reflection.
