In October Save Our Bank will be celebrating its fifth birthday. The campaign, set up initially with the help of Ethical Consumer, started by asking people to show support for a campaign to save the then troubled Co-operative Bank by signing up online.
It was similar to an online petition – in fact some people in the beginning thought it was a petition, although it was never clear who they thought we were petitioning. But most online petitions don’t last five years.
At Save Our Bank we realised two things, that to meet our objectives fully would take time and, that when we did win things, they would need to be defended. That’s why we created the Customer Union for Ethical Banking. Now, as we focus on growing the union, it’s worth revisiting the question of what it is we’re trying to save.
Co-op Group involvement
The Co-operative Bank is unique. In 1992 it was the first retail bank anywhere to come out with a firm ethical policy. This was a mark of difference. For a bank that didn’t have the scale to compete on price it was a valuable marketing tool. But it also led the bank into having a political voice. In 2005, the bank famously closed the account for Christian Voice because of their anti-gay views, and in 2015 – when the bank was majority owned by US hedge funds – it proudly trumpeted its inclusion in the Don’t Bank on the Bomb Hall of Fame.
This is in an industry that often ranks along with oil and mining in its, at best amoral, at worst corrupt, pursuit of profit. For Ethical Consumer, over the years it has been important to be able to point to an available alternative, a retail bank that had never supported apartheid, that largely kept out of the arms industry, and that mainly managed to refuse investment in fossil fuel extraction.
When the Co-operative Group lost its controlling share of the bank in 2013, mainly to US hedge funds, many feared that this would mean the ethical policy would become anodyne and meaningless. Lots of customers left then, and many have left in the years since (the bank reported 20,000 active current account holders lost during 2017).
Save Our Bank, however, was founded on the idea that we customers have power – if we stick together. We realised that by staying loyal, the possibility that we might leave en masse would have real leverage with the bank and its owners. We launched with the slogan “don’t switch yet”. Of course, the bank came to realise the value of this, which meant that they listened to what we had to say.
When we called on them not to use the review of the ethical policy as an excuse to water it down, they responded with a promise not to drop any commitments – with the result that the policy is now stronger than before. In fact, with all the negative headlines – about losses at the bank, concerning the drug habits of former chair Paul Flowers, and announcing that the bank was ‘up for sale’ – the loyalty of the bank’s customers has become the bigger story.
This is not lost on the bank or its owners. After the Co-operative Group sold its remaining 1% share late last year, many have asked why it should be allowed to continue calling itself the Co-operative Bank.
The bank’s response – an agreement with Co-operatives UK to support the movement (the bank has provided £1 million support for co-operative development) – only goes so far. Having a permanent independent customer voice in the form of the Customer Union can give substance to the idea that the bank does still answer to its customers.
An innovative co-operative
The Customer Union is a cooperative and owns a small shareholding in the bank – a symbolic stake that we hope to grow. The hedge funds will exit at some time, our aim now is to find ways for the cooperative movement to buy its way back in when that time comes.
Consumers can wield power through boycotts. Ethical Consumer has long championed the power that consumers also have by making positive choices. The Customer Union for Ethical Banking is an example of how, when good ethical practice is in danger, organised customer loyalty can be a powerful weapon.
Save Our Bank is on a drive this year to persuade more Co-op bank customers to formally join the Customer Union. For only £12 per year you can become part of one of the most innovative and unusual modern market campaigns.