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Challenger banks: the 'new face' of banking

Banks claim to think local and personal but can challenger banks really take on the big boys?

 

by Michelle McGagh on Feb 12, 2014 at 15:42

Challenger banks: the 'new face' of banking

'Local' and 'community' are two buzz words within banking as companies try to distance themselves from the high street giants – but can a bank truly work for the people?

This may seen a ludicrouns notion but it works in Germany where a network of regional ‘sparkassen’ take deposits from local savers and lend to local individuals and businesses for the benefit of the community. The one catch is the sparkassen are not-for-profit.

Labour leader Ed Miliband last year proposed a network of regional banks to provide capital to businesses, while Bank of Dave has seen minibus millionaire Dave Fishwick set up a local bank in his home town of Burnley.

And it seems the idea has caught on. Here are some new banks, and some old ones, that are trying local banking on for size.

Next: TSB

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1 comment so far. Why not have your say?

Khayyam

Feb 16, 2014 at 16:25

Yes, didn't we have something that worked like this? They were called building societies but they (largely) failed because they offered less attractive rates to borrowers; the banks seduced the borrowers with unsustainable rates and when it all went pear-shaped everybody paid the price - except the bankers, because they are so exceptionally talented. What a terrible thing it must be to have institutions that are not for profit.

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