Banking, Starbucks and birds
May 4, 2009
Today John Gapper proposes Starbucks to become a retail bank. “It has about 7,000 US stores, which gives it as much bricks and mortar as the biggest retail banks. These are quite pleasant stores to go into, and many people do so each morning simply to obtain a cup of coffee.
What if Starbucks opened an online-only retail bank offering competitive deposit rates and a modest range of loans and mortgages? It could do that by partnering with a finance company such as ING, which has the appropriate banking licences. All it would need to do is install ATM machines in its outlets, which would involve investing some money but would allow it to get more out of its existing branches.”
In “a lesson for bankers from the birds and the bees” Gillian Tett (May 1st) refers to brainstorming of bankers and biologists. The aim was to see whether the animal kingdom or global environment might offer lessons on how to predict and control (mis)behaviour of bankers – and thus avoid the type of financial panic that has just convulsed the system. “There is a common ground in analysing financial systems and ecosystems, especially in the need to identify conditions that dispose a system to be knocked from seeming stability into another, less happy state.”
Tett concludes that “it is a powerful reminder that banking is simply one branch of human activity, alongside many others. This is a lesson that badly needs to be relearnt. During the credit bubble, many bankers viewed finance as a quasi-sacred, semi-detached world where society’s normal rules barely applied. Now the bubble has burst, non-bankers are apt to see finance as utterly peculiar – if not demonic. Unless we find a way to demystify finance and reintegrate it into society, it will be hard to build healthier banks.”
Reintegrating the banking sector into society is the key message. This has to be any banker’s priority. Be it through coffee or birds, they should really re-enigeer the governance of their industries. Reconnect with stakeholders in order to regain trust and earning capacity. We continue to discuss these challenges with bankers, preferably over a cup of coffee.
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