Monday, 1 October 2012

Good Money

I've been told that in the past bankers were well respected, trusted people, and you probably knew your bank manager personally, and well enough that he (back then it was almost certainly a he) could understand your situation and find the best account to suit you. That's not quite how bankers are seen now.

Bankers seem to be trusted even less than politicians at the moment, and banks are seen as evil establishments either through being devious (fixing interest rates or selling PPI incorrectly), incompetent (selling PPI incorrectly or having computer crashes) or being greedy (the amount given out for bonuses even when banks are partly owned by the state). But despite people calling banks all kinds of names it's not often you actually hear people talking about the ethics of their bank.

A bank that's running well, pleasing its customers and has happy staff and shareholders doesn't necessarily mean an ethical bank. Do you know who your bank loans money too, or who they borrow money from? What do they invest your savings in; deforestation, fossil fuels, gambling, the arms trade? Once the money's in the bank it's easy to forget that someone is still using it, making it work for them, it really isn't just sat in a vault. Many high street banks have been accused of financing the arms trade, oil and nuclear industries and many other not-so-ethical companies. A quick internet search bring up Barclays as the banker for the arms manufacturer BAE (very local to us in Preston), HSBC as the banker for mining company Rio Tinto and BP uses Natwest. None of these companies are automatically evil, but if you wouldn't want to support them as a consumer do you really want to share a bank with them or have your money used to fund them?

Like with any consumer choice, the best way to create change is to vote with your feet. Whether it's giving ridiculous bonuses or lending to meat farmers or arms dealer, if you don't like what your bank is doing pick a different bank. But which bank and how do you decide?

This March saw the start of the Move Your Money UK campaign which, in their words, is a
 national campaign to spread the message that we, as individuals, can help to build a better banking system through our buying power.
Their aim is to give you the information you need to pick an ethical bank that's good for you. So to find out how your bank measures up you can go to the Move Your Money UK website and look at the What About My Bank? section or check out the free banking guide that Ethical Consumer has created.

When I looked up my bank I discovered it has an ethiscore of 3.5/20 and invests in the arms trade. Doesn't sound great, so what are my options to switch to?

For current accounts the Co-operative Bank looks like the best bet. While it is only given a score of 5.5 this is low because the owner the Co-operative is involved in animal farming and this is one of the negative criteria it is measured on. The Ethical Consumer report says that

Best Buy Current accounts from the Co-op Bank and its Smile internet brand offer a unique ethical policy and a campaigning brand. Their relatively low score is more than compensated for by their sector-leading approach.

There are lots of building societies that score highly too and also some credit unions which run current accounts through the Co-operative. Unlike my current bank it's very easy to find an ethical policy on the Co-operative Bank's website. It all depends on what's important to you personally, and on the Ethical Consumer site you can switch the criteria to find the best ethical bank for you. Why not try it?

For savings accounts you find more options. There is the Co-operative, Triodos the Charity Bank and the Ecology Building Society. I'm pleased to see my savings account with Triodos scores well. It's true that you probably wont get quite as good interest rates as the highstreet banks but customer service scores are high and at least your money will be working for good not evil. Why not have a look this week and make the change?

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