- Provide a good online banking experience
- Operate a banking entity transparently and for the benefit of its members
- Bring the benefits of open source software to the financial sector
- Bring the benefits of a lean/agile approach to the financial sector
- Document our journey to make it possible for other people to follow the same path
The FCA regulates entities in these firm types. I've listed them all below, but split them into ones that may be relevant and those that are not:
Relevant firm types
- Building societies - main activity is providing loans that are secured on residential property; also offer other forms of lending and investment, money transmission services and banking and insurance services.
- Mutual societies - includes co-operative societies, community benefit societies, friendly societies, building societies and credit unions.
- e-Money institutions - e-money is electronically (including magnetically) stored monetary value, represented by a claim on the issuer, which is issued on receipt of funds for the purpose of making payment transactions, and which is accepted by a person other than the electronic money issuer; types of e-money include pre-paid cards and electronic pre-paid accounts for use online.
- Payment services institutions - providing payment services; includes banks, building societies, e-money issuers, money remitters, non-bank credit card issuers, non-bank merchant acquirers.
Irrelevant firm types
- Consumer credit - offer credit, loans or debt services; includes credit card issuers, credit brokers, payday lenders, log book lenders, peer-to-peer lenders, pawnbrokers, and debt management and debt collection firms.
- Financial adviser - offer retail investment products (e.g. life policies, unit trusts, personal pensions); give consumers investment advice.
- Investment managers & stockbrokers
- Wholesale investment firms
- Sole advisers
- Insurance intermediaries
- Mortgage brokers & home finance lenders
- Asset management
- Collective investment schemes - can be an Authorised Unit Trust scheme, an Investment Company with Variable Capital, or an Authorised Contractual Scheme.
In order to provide a decent online banking experience, we think we need to offer basic "current account" facilities. If we do not offer overdrafts or loans, nor pay any interest, and we charge a fee to cover costs, we hope to avoid being categorised as accepting deposits in the eyes of the FCA and the PRA. If you are categorised as accepting deposits, we think you need to be one of the following:
- Building Society
- Credit Union
- Friendly Society (?)
The FCA Should I Become a Bank flowchart is useful in deciding what kind of institution might be suitable for our purposes.
- Collaborate with an existing CU
- Take-over an existing CU
- e-Money Institutions
- Payment Services Institutions
Not worth pursuing
- Bank - minimum capital requirement of €5 million
- Building Society - minimum capital requirement of £/€1 million; no obvious advantages over a credit union
- Friendly Society - it's not obvious that they are allowed to operate current accounts
- Crowd-funding - not specifically mentioned in the FCA list of firm types, but not relevant to what we want to do
Reasons to stop
- It's going to take too long
- It's going to cost too much money
- It's going to take too much of our time
- Bank of England
- Financial Conduct Authority
- Prudential Regulation Authority
- Money Advice Service
- Financial Services Compensation Scheme
- Financial Ombudsman Service - setup by parliament to sort out individual complaints that consumers and financial businesses aren't able to resolve themselves
- Mutuals Public Register - definitive (?) search (but no list of) UK mutuals