The first Future of Banking Commission heard witness statements from key financial industry experts. Greater accessibility to banking services was a recurring theme, with a lack of trust in financial services also raised.
Delegates at the Future of Banking Commission’s inaugural session heard evidence from leading figures in the financial sector, including Brendan Barber, secretary general of the TUC and Adam Phillips, chair of the Financial Services Consumer Panel. Accessibility chimed throughout the session, with calls coming from the Federation of Small Businesses national chairman John Wright for a new banking structure based on the Post Office model, which would provide greater accessibility to basic banking in rural and low income areas.
Banking a human right
Sian McLean, head of financial inclusion at social awareness group Toynbee Hall, called banking a ‘basic human right that must be maintained’. Setting the tone of the first debate of the day Ms McLean went on to question how major players in the financial sector were content to let unauthorised overdrafts build up prior to the crisis, only to come down hard on customers once the recession hit. Ms McLean was also adamant that banks should promote basic bank accounts so that no one is excluded from the banking process.
Future of Banking Commissioner Roger Bootle raised the issue of ethics, which led on to a debate around whether consumers are provided with a service, or are sold products. The Commission discussed the extent to which people are not given advice that would allow them to make informed decisions. Vince Cable MP said: ‘Banking can be a dangerous place if you’re not on top of the situation. This is especially the case for people on the fringes of society.’
The commission heard views from media commentators Jeff Prestridge and Will Hutton. Both identified the scale of retail banking as an issue the financial sector must address. Will Hutton told the commission: ‘We need smaller banks to help make the banking network more resolute. Banks have mismanaged risk.’ Jeff Prestridge added: ‘Size does matter, some of the bigger building societies have done no better than the banks. Building societies should go back to basics, return to their roots.’
Money money money
The Future of Banking Commission also heard evidence from Brendan Barber, secretary general of the TUC. Mr Barber leveled blame for the financial crisis at the banks. He maintained that there had been too much emphasis on making money and not enough of looking after the best interests of consumers.
Which? chief executive officer Peter Vicary-Smith said: ‘The evidence we’ve heard so far reinforces my belief that our banking system is in dire need of root to branch reform, not just to avoid another financial crisis but to ensure that banks work for the public good instead of purely for their own profit.’
More from the Future of Banking Commission
The next session of the Future of Banking Commission will be held on 25 February, when Mervyn King, governor of the Bank of England will be among those giving evidence.
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