(Unless you are a P2B Lender, that is)
It’s not often I get to write one blog named in honour of a fine Blur song, that links to another post which has a bastardised version of a Shirley Bassey tune for its title – all within a day or two. But then, it’s not often that banks – including the Bank of England – get embroiled in a row about interest rate fixing.
Who knows what will unfurl today when Bob Diamond goes in front of the Treasury Select Committee… who knows what really happened during those telephone calls, or what the impact has been (and will be) on the world economy? We may well never know.
And really, for most of us, finding out is just one, small, part of the healing process that’s now desperately needed to rescue financial services from the bottom of the trust pile. We’ve said before, and we’ve said again, that we’re not here to bash the banks. We want to see British banks back to their best as soon as possible, our collective futures depend upon it, but there is one point on which we disagree.
You see, as far as FundingKnight is concerned there is another way and it’s peer to business lending.
The other post I mentioned, aptly named Diamond aren’t forever, questions the impact of the flurry of banking scandals and systems glitches that have occurred over the past weeks, months and years and asks what the enduring effect might be on customer behaviour – in particular on customers of traditional, high street banks.
It draws attention to the commoditisation of banking products which must, by now, be about as commoditised as they can get.
When it comes to the banks, the options probably are relatively few. Products can remain cheap and service poor, or people can pay for better service and increased flexibility. Most people would say it’s impossible to have both – and with a bank, they’re probably right.
But what happens when you remove the massive cost infrastructure associated with running a high street bank?
What happens when you replace decade’s old legacy systems that are about as easy to update as a leopard’s spots with fast, flexible lending platforms built with web 2.0 in mind?
What happens when you stop asking new customers to subsidise old ones, or safe bets to offset riskier ones?
What happens when you stop getting in the way and simply provide a way for people to re-connect with each other?
What happens when you build a fast, efficient online marketplace that allows the public to vote on what’s fair, and what’s competitive?
What happens when people can choose to lend to their own community rather than provide the savings balances that allow retail banks to trade the risk markets?
We think that peer to business lending is what happens. We think that letting the great British public lend directly to small business is a great way to rediscover trust, authenticity and a community spirit.