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Bank of Dave: Money to Burnley

What can we learn from one man's attempts to set up a bank of his own?

By Stephen Clarke Published 12 July 2012 16:37

Dave Fishwick, in his bank. Photograph: Channel 4

9pm on Channel 4 tonight sees the first episode in a two-part documentary called Bank of Dave. It follows Burnley businessman David Fishwick as he attempts to open his own bank to serve the people and businesses of his home town.

The programme will undoubtedly provide more than a few salutatory lessons for British banks. I know this, not because I have been fortunate to witness an early screening but because I have read David's book Bank of Dave: How I Took on the Banks, which chronicles his endeavour.

David’s attempt at setting up a bank and turning a profit in 180 days is fascinating, and makes one wonder whether we need more Banks of Dave. I think we do.

The total start-up costs for Dave’s bank, including premises and equipment, were £9,000 and his weekly overheads came to £396. Some will argue that Dave’s costs are not indicative of what is required, and in some respects they are right. Banks probably need more than one laptop and a couple of notebooks. Even then, Dave shines an unforgiving light on the high overheads, including inflated salaries and cumbersome, out-dated IT systems, that burden many British banks.

Dave also shows that nowadays banks no longer have a monopoly on the services they provide. Dave's bank does almost everything a high-street bank does: it makes loans, takes deposits and even makes investments in property, stocks and shares. But because he wasn’t granted a banking licence by the FSA he can't call his bank a "bank" or say that he takes "deposits".

Increasingly people are choosing to avoid banks when accessing financial services. Dave himself gets advice from Giles Andrews, CEO of peer-to-peer lender Zopa. The government and regulators should not stand in the way of innovation and regulators could do more to ensure that people feel confident using new financial services that meet appropriate standards.

Dave’s most important insight, and this comes on page one of the book, is that "all banks are about people". This is something forgotten by many of Britain's large banks. Dave meets the people he lends money to, and he knows the property he invests in. His decisions are based on more than just credit scores or the value of the security. A bank that adopted Dave’s practices would have lower default rates, higher customer satisfaction, and greater ability to cross-sell products to loyal customers. The recent growth of Metrobank and Handselsbanken in Britain is testament to this.

The Bank of Dave not only casts many of Britain’s banks in a dim light but, perhaps inadvertently, it also demonstrates one of the inherent weaknesses in our banking system. Dave promises to guarantee every deposit in his bank with his own money. He also makes it clear that "we wouldn’t be lending what we hadn’t got", not leveraging the assets of his bank.

In these two respects Dave’s bank is relatively unique, and therein lies the dilemma. People want security but many also want leverage with the risk and reward this entails. Regulators would love it if all deposits in every bank were guaranteed by their owners but this would come at a price. Leverage and debt is now a sin under the government’s austerity drive but one of the commonest criticisms of the banks is that they are not lending.

In preparing to set up his bank, Dave meets David Buik, a market analyst, who tells him: "you’re not going to stop the banking system blowing up from time to time". Dave disagrees; his bank would be 100 per cent guaranteed. As Britain looks to reform its banking system it would do well to learn from Dave, but some of the lessons may be harder to swallow than others.

More from Stephen Clarke

View the discussion thread.

48 comments

Sat, 2012-07-28 10:32 — john mcpeak (not verified)

Keep up the good work. Will support you 100%

Sat, 2012-07-28 10:32 — john mcpeak (not verified)

Keep up the good work. Will support you 100%

Sat, 2012-07-28 10:26 — john mcpeak (not verified)

Keeping up the good work . Will support you 100%

Sat, 2012-07-28 10:26 — john mcpeak (not verified)

Keeping up the good work . Will support you 100%

Fri, 2012-07-20 14:52 — New statesmanAnn (not verified)

After seeing this documentary on C4 last night, I have visited Bank On Dave website, and signed-up for Dave's savings account.

Savings cannot be withdrawn for 30 days, but fair enough!

Fri, 2012-07-20 13:33 — approvalUK (not verified)

I watched with interest, its a great concept and goes someway to making the world just a little bit better. We defo need more Dave's out there. As for the regulation, every bank had to start somewhere and many started by giving out simple loans at a profit from deposit, its honest and core retail banking at heart. http://www.approval.co.uk

Thu, 2012-07-19 22:53 — Tom the Banker (not verified)

Great cause, and best of luck to the guy. And agree that the FSA is bloody rubbish.

But...

1) Not true that making lending decisions based on human interaction will lead to lower default rates than credit scoring. Sorry, but it's a fact that statistical models are better. Not an opinion - a fact.

2) Yes, the FSA is crap, but having regulation is vital. Unfortunately, people in general will push things as far as they can get away with - not only bankers but lots of people. Remember that the FSA have just fined Barclays a massive amount of money for pushing things too far.

Thu, 2012-07-19 14:45 — barry guest (not verified)

mussletoff, how do i open an account.

Thu, 2012-07-19 14:45 — barry guest (not verified)

mussletoff, how do i open an account.

Thu, 2012-07-19 14:43 — barry guest (not verified)

mus0ltoff,how do i open an account.

Thu, 2012-07-19 10:15 — ChrisHas (not verified)

What if Dave does not have the money to back up his promise to pay back depositors ? How can we trust him to be as good as his word ?

Think I will stick with FSCS guarenteed accounts thank you. The government can print money to repay me - if Dave tries that he will go to prison

Wed, 2012-07-18 08:05 — Lippriermpego (not verified)

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Tue, 2012-07-17 20:21 — Gary J (not verified)

The first episode seemed to be all about how Dave could avoid rules that protect people depositing money - I hope there is a mindset change in episode 2. If the first comment in this list is right and loans start from 17%APR then there should be lots of money to donate to charity until the bad debts hit....and this doesn't happen in the first few months, so C4 needs to stick with this for the long term.

Tue, 2012-07-17 20:21 — Gary J (not verified)

Sun, 2012-07-15 19:20 — John Ruddy (not verified)

I'm not so sure this venture is as wonderful as it has been portrayed. His loans start at 17.4% APR and go up to 29%, while his savings are the peer-to-peer model that he obviously pinched from the company he visited.

Throughout he railed against credit unions. I couldn't work out why, and it was never explained. Credit Unions can now do all the things a bank does - take savings, make loans to people and business, and pay interest on savings. Maybe it was because Credit Unions are prevented from charging as much he does?

Sat, 2012-07-14 20:19 — Mrs.Josephine Hyde-Hartley (not verified)

Yes I've noticed that little shop in Burnley. I had to look twice at the shop sign..but if he doesn't do deposits one wonders if he can do favours?

Sat, 2012-07-14 05:18 — Nertr (not verified)

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Fri, 2012-07-13 21:14 — Jason5487 (not verified)

Its called "Bank on Dave" not Bank of Dave!! Just a spelling error there :)

Fri, 2012-07-13 21:14 — Jason5487 (not verified)

Its called "Bank on Dave" not Bank of Dave!! Just a spelling error there :)

Fri, 2012-07-13 21:14 — Jason5467 (not verified)

Its called "Bank on Dave" not Bank of Dave!! Just a spelling error there :)

Fri, 2012-07-13 19:23 — Winnie Birkenhead (not verified)

Go on Dave you are what the ordinary honest people need.Sick of getting ripped off by the big banks with their overpriced charges and being conned with PPI.Fight it all the way Dave for us and by the way you are so entertaining and proud that, you are from Burnley,cant wait to watch next weeks episode to see how you have got on

Fri, 2012-07-13 18:24 — Spyder (not verified)

Go Dave Go!!

Fri, 2012-07-13 17:12 — bev fogg (not verified)

if every body gave dave a pound he would have the 10 million he needs!!! Would that be legal ?

Fri, 2012-07-13 16:55 — FSA con job (not verified)

great stuff this guy

it was a shame that the point wasn't quite made that the only reason the FSA exist is that the banks are as bad as they are, in other words they need the banks for their own survival, hence there's no way anyone outside of their world can come and play. Corruption requires other corruption for it to work.
You can tell he's got the banks and the FSA scared

Truly hope Dave wins

Fri, 2012-07-13 12:06 — LoisRuntz

I think Moliere or Shakespeare suggested that "there is no one so funny as someone who does not appreciate just how delusional they actually are".

However - excellent Mockumentary.

For a real life case study, the show could have been good, great or even excellent, if only David Fishwick had trained as a Banker, had secured Professional Accreditation as a Banker, and had worked for an extended period of time in a Bank, and not simply been a colloquial Minibus Operator.

Tue, 2012-07-17 01:07 — Jane Jones (not verified)

In addition to my earlier response I would like to take issue with your reference regarding the hilarity of delusion.
Since the time of Shakespeare we have thankfully learned a great deal about mental illness, among which is that delusions are by their very nature lacking in insight, if individuals with delusions had insight they would not be delusional they would just have unconventional ideas out of step with mainstream thinking.
Finally it was not clear to me at whom the reference was directed, you or Dave? After hearing what you both have to say I would have identified you as the more grandiose. I think referring to Dave as a colloquial minibus driver was the give-away.

Tue, 2012-07-17 00:20 — Jane Jones (not verified)

If Dave had trained as a banker and served his time on the banking floor I suspect his bank would be as corrupt and greedy as the rest of them and he would not be setting out to establish a bank outside the current system as a point of principle.
With regards to his high interest rate, all profits go to charity as I understand, so accusing his rates of being excessive for his own gain is misleading.

Fri, 2012-07-13 10:26 — matthewws20 (not verified)

apuseagle & dietaeasy

Fri, 2012-07-13 08:57 — dave cook (not verified)

I hope that everythin works out for you and you get what you want,just dont let the smiling pigs get you down Lol, you go for it my lad and every one is behined you .....

Thu, 2012-07-12 23:31 — Garry W (not verified)

Please keep going and don't let the buggers get you down. The tree needs shaking from the top to the bottom and I think you have just shook it.
The public will be behind you and I certainly am.

Thu, 2012-07-12 22:51 — andrea biggin (not verified)

Fantastic programme.why dont you do a petition on the government website and if it gets enough signatures they have to discuss it in parliament. Take it all the way dave.i am sure the british public would support you.

Thu, 2012-07-12 22:40 — New statesmanTeresa (not verified)

In a world where making money for the sake of it seems to be the main motivating force how nice to see a genuinely altruistic man like dave, who despite delusional people who are full of their own self importance trying to dissuade him from striving to take onthe "big boys", he's refused to be brow beaten and talked down to. Well done Dave, I'm proud to be from burnley and wish you all the success in the world.

Thu, 2012-07-12 22:39 — Andy Kay (not verified)

Yep I'm with you on this one and all the other normal tax paying public, who do an honest days work and get little or no recognition.
The public are sick and tired of these so called bankers, accountants, barristers and MP's who run the country and have little or no experience of what real life is about.
How can it be right that MP's commit offences, qualify for legal aid and move on with a nice settlement, thank you??.
The Olympics, Diamond Jubilee concert, Wimbledon and any other high profile concerts always seem out of reach for the normal man and women on the street.
I wish we could also have a peoples government, that was made up of again normal people with common sense and get theres idiots out of power.
Good on you Dave,!!! show these blood sucking, dishonest banks you mean business and it would make my day if in the future you could put some out of business

Thu, 2012-07-12 22:30 — Mr Dobson (not verified)

Hey Dave Watched you on the box, great program, this is what the people want a Bank of Dave, we are all sick of banks laying down the laws to suit themselves so the fat cats can get even fatter, How can they loose Billions and still pay the bankers bonuses, it does not add up, any fool can see that, and I'm only a bricklayer, you don't need a degree in maths to see what is going on.
Kick ass Dave, give the people what we all want, a HONEST BANK.

Thu, 2012-07-12 22:18 — Robert Eardley (not verified)

This just shows that in order to run a "bank", and rip people off you have to go to the correct school and pass the banking exams because hard working honest people with a decent ethical code are forbidden by LAW from doing so.

The joke at the end of episode one is that a failing institution like the FSA which has provided fuck all protection for any of us against institutional greed is now moving it's own goal posts to prevent a fully guaranteed bank being formed.

My savings currently earn shag all in a "proper" bank and Halifax just increased my mortgage on the back of what is becoming a fraudulent inter bank lending rate so WHEN this happens mate I'll be there because 5% is twice what the rest of these wankers are paying.

Thu, 2012-07-12 22:18 — chris.c (not verified)

How can the fsa get away with this, they are clearly eating out of the bankers pockets!

I've been bullied all my life too!'s picture

Thu, 2012-07-12 22:12 — I've been bullied all my life too! (not verified)

Dave you're a superstar... and bloody entertaining too!

Go get 'em... those snotty Oxbridge, Etonian Merchant Bankers who are given licences to legally thieve and pillage all our hard earned money in bonuses by their pals the 'regulators' who clearly regulate S**T as you would say!

They're definitely scared that you'll make it and in turn make them all look stupid and expose them all for the merchant bankers they all are! Including some of the 'stiff upper lip' t**sers who all instantly said no to you... you'd 'shit shower' on their club if they let you in and prove them wrong!

"No b**tard Credit Union!" I love it!

I wish you all the best... I love your style, your outlook and your approach!

If nothing else... hopefully you'll rattle their cages and give them a few bruises!

All the very best!

Thu, 2012-07-12 22:11 — ron wildey (not verified)

would love to see a bank like daves in every town. would invest money without a doubt.

Thu, 2012-07-12 22:07 — New statesmansharon (not verified)

The FSA want to back off and support him, How did banks start in the first place? if Tescos etc can do it why cant Dave??
when can l open a savings account, cant trust Barclays they have just ripped me off with PPI, cant trust high st banks anymore. Will open accont with him straight away, someone normal and honest for a change.
would be a good chap for the PM aswell.
Very good best to him

Thu, 2012-07-12 22:07 — New statesmansharon (not verified)

Thu, 2012-07-12 22:04 — Ian H (not verified)

Interesting start and love Dave's down to earth approach to the whole subject. I wish him every success but somehow cannot see the establishment letting him do it, I hope I'm proved wrong.

Thu, 2012-07-12 22:03 — Robert moeran (not verified)

When are you going to open in Ireland. Banking needs to be reformed and this could be it

Thu, 2012-07-12 21:56 — Anita de Lange (not verified)

Alternative email

Thu, 2012-07-12 21:52 — Anita de Lange (not verified)

Tell me where when and how and I will sigh up. Love to concept and philosophy. I am a professional with a understanding of business acumen. I would like to support your project.

Kind regards,

Fri, 2012-07-13 12:45 — tykemike (not verified)

http://www.burnleysavingsandloans.co.uk/

Thu, 2012-07-12 21:40 — terry g (not verified)

love it and would love to somehow help ,,long termed unemployed but got ball as big as lemons,,if not i will love to have my unemployment money put in it,,as i love wot your doing

Thu, 2012-07-12 21:40 — terry g (not verified)

love it and would love to somehow help ,,long termed unemployed but got ball as big as lemons,,if not i will love to have my unemployment money put in it,,as i love wot your doing