April 3, 2023

For Love ❤️ and Money 💸


The Covid19 crisis is a visceral reminder that “we cannot live only for ourselves”, that the bonds of family, friendship and community are what make life possible, and meaningful.

Around the world people have come together in support of one another. In the UK for example, a recently created mutual aid website lists over 2000 local groups and in the US mutual aid societies are springing up across the Union. In China, Wuhan residents organised themselves around districts in support of one another.

This predisposition to community is easy to take for granted in the normal run of things. It is the water in which we swim, and like the proverbial fish, who, when asked, “how’s the water?”, responded “what the hell is water?” we often fail to recognise its indispensability.

The finance sector is particularly guilty of this, for although we pay lip service to notions of community, ours is an industry dedicated to the exchangeable, measurable, world of money. Community, in contrast is stubbornly intangible, its true value neither bought nor sold and is, as a consequence easily neglected.

This would not be a problem if it were not for fact that finance permeates every aspect of people’s lives; from birth, until death, in sickness and in health, whether sacred or profane.

Yet all too often the industry seems to operate outside of the boundaries of fairness and reciprocity that characterise a healthy community. On the macro level, the 2008 financial crisis is the case in point, whilst customers were punished for their profligacy, those responsible for the system drew bonuses.

But it is their day-to-day experiences with mainstream retail financial services that is the cause of many people’s distress. The pages of small print, the baroque language, the hidden charges, the complicated pricing; the distant, unhelpful call centres, the one size fits all financial products that are designed for everyone and as a result don’t quite fit anyone.

The fines that punish customers for the smallest of infractions, but take no heed of errors committed against them, the crappy savings rates, high cost loans and sneaky incremental charges that add up over time.

The business models premised on people messing up. The fact that the more people are in need, the more they are charged while those most desperate are excluded all together. The feeling that finance is a casino and that the house always wins.

Moreover we insist on a view of our customers that simply does not match reality. In the most common version of ourselves we assume that people are atomised, rational, self-regarding calculators. Yet, the truth is that most people struggle with basic maths, let alone act as calculators. In the UK for example half the working age population have the every day maths skills roughly equivalent to a primary school child.

Struggling to make ends meet, they neither have the time, nor the skills to navigate complex and opaque financial products and so stand little chance of winning in a relationship where the other side is expert and dedicated to taking advantage of it.

Far from being precise rational machines, most people are emotional approximators, their finances rules of thumb, driven by big, essentially non monetary considerations — like “I need to be able to look after mum or what happens if Sarah needs specialised treatment.”

Most importantly people are not atomised, they are embedded in networks of obligations and duties, of family, of friendship and love…of community; and for most people the little money that they have operates in the service of these connections.

Indeed money often finds itself sitting, sometimes uncomfortably, in the midst of the sacred. It is the present an Aunt gives her nephew on his birthday, its the savings account a father sets up for his son, the 50 quid a friend gives a mate in need. It’s money, but money can also be other things, a gift, a way of saying I love you, an act of friendship.

Yet the the working assumption of most retail financial services is that money is simply digits on a screen, and that there is a single vertical relationship between customer and service provider. A joint account is about as far as it goes when it comes to recognising that people have financial relationships with one another.

As a consequence, whether it’s a condo association in America, a school parents group in the UK or a family savings club in East Africa, efforts at financial collaboration everywhere share the dual qualities of being both commonly practiced and greatly underserved.

An industry that fails to provide services that address its customers needs, is an industry in trouble. The Covid19 crisis and the surge in community spirit has only served to highlight this.

Over the last few weeks, individuals, governments, not for profits, community groups and businesses, small and large, have responded to the crisis with acts of generosity and solidarity. Here the finance sector has not been entirely out of step, in the UK banks have offered customers mortgage holidays, in Kenya MPESA has removed charges on transfers under a 1000 KSH and in the US auto insurance companies are providing rebates.

There are signs too that the crisis is driving innovation. In the UK, Starling Bank has added a feature that allows personal account holders who are self isolating to issue a card to a friend, neighbour or volunteer, so that they can buy groceries for them. Another company, Railsbank, is building a product called Lightening Aid to support financial collaboration amongst mutual aid groups.

Services enabling customers to manage money in groups were on the rise prior to the crisis. Examples include Esusu, Splitwise and the innovative Kroo. My own company, aidx, which I co-founded with Gerry Mc Hugh is built around the practice of mutual aid and has developed a product called Moja that enables friends and family to pool money.

But developing financial tools that enable this horizontal collaboration is not enough. We need to build products and services that are fair, simple to use, inclusive, transparent and responsive to the needs of different individuals and their communities. Modern digital technology has made this more possible than ever.

It is a task that is not outside of the financial sector’s grasp. Many financial services have their origin in credit unions which were explicitly designed to serve communities. Today companies like Monzo and Starling are setting new standards in transparency and customer service.

Covid19 has reminded people of the ties that bind. The industries that will flourish in the post-crisis world are going to be those that honour this new spirit. Finance will be no exception. To succeed we must commit ourselves to society’s shared values, and learn to build services for love as well as money..

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