Splashing the cash: Nationwide boss Debbie Crosbie
The world of money is infested with fintechs, most of which seem to be run by young hipsters in dazzling white trainers, wielding an app and an attitude.
These tech bro tycoons have probably never darkened the door of a bank branch, let alone brandished a biro with intent to write a cheque.
They are digital natives to the extent they boast their toddlers are video game creators. But even if these fintech founders are geniuses, other qualities are needed to be good at banking – trust and social awareness.
Nationwide, founded nearly 140 years ago, may seem a dinosaur compared with the likes of Revolut. Its chief executive, Debbie Crosbie, even believes in keeping branches open, because they are important to many customers and communities.
Along with other lenders, Nationwide has made profits off the back of rising interest rates. Its income increased by more than £800m and its profit margin widened significantly as rates shot up.
That may seem jarring in the midst of a cost of living crisis, but Crosbie has given back £1billion to customers.
Now she is literally giving away free money – £340m – to eligible members. Nationwide can do this because it is a mutual building society, owned by its members and not answerable to City shareholders.
Mutuals have been under siege for the past three decades.
In the 1990s, there was a craze for floating on the stock market, with Halifax, Alliance & Leicester, Bradford & Bingley and Northern Rock becoming plcs.
Life on the stock market did not suit them, and all came to grief in the financial crisis.
More recently, greedy carpet-bagger bosses tried to sell mutual insurer LV to American private equity barons but were thwarted by members after a campaign by this newspaper.
Fintechs may boast about innovation. But mutuality – the concept of ordinary savers clubbing together to raise funds to build and buy homes and insure against sickness and death – is one of the best ideas ever.
Lenders such as Nationwide transformed the face of this country by enabling millions of ordinary people to buy their own home.
Mutuals are not perfect, but they have been as revolutionary as social media and fintech – and more beneficial.
Crack on
Hard though it may be to sympathise with the travails of Revolut, regulators are not covering themselves in glory over its interminable application for a UK banking licence. This is not, as an increasingly vocal lobby of petulant entrepreneurs complains, because ‘unaccountable’ watchdogs are creating a ‘hostile’ environment in the UK.
They say unaccountable, I say independent. And it is not hostile to insist Revolut produce a true and fair set of accounts before giving it a banking licence – it is perfectly reasonable. This is the minimum customers and taxpayers should expect.
For an auditor to ‘qualify’ a set of figures, as BDO has done, is incredibly rare.
It should be taken very seriously indeed, particularly when it comes to a banking licence, where the bar for trust is rightly set very high. What is not reasonable, however, is the way this has dragged on. Revolut has asked the Bank several times whether its application is a lost cause, but has been told the process continues. The Old Lady appears to be under political pressure.
But the whole point of independent regulation is to take decisions out of the hands of self-interested politicians who may not fully understand the risks. If the Bank believes Revolut does not deserve a licence, it should have the guts to say so – regardless of ministers wanting to trumpet Brexit Britain as a fintech Nirvana.
Allan checks out
The fallout from the CBI scandal has rippled out to Tesco, whose chairman John Allan, an ex-president of the group, has been bounced into an undignified exit.
This is despite the fact the supermarket group received no complaints about him, and an investigation uncovered no wrongdoing. Allan denied three allegations, and apologised for a fourth incident, a clumsy remark about a CBI staffer’s dress suiting her figure.
Women should not be subjected to toxic sexism at work. Yet it is troubling that men are being punished, not on the basis of guilt, but because accusations against them ‘risk becoming a distraction’.
That is a new corporate euphemism, which carries its own burden of risk.
This post first appeared on Dailymail.co.uk
