What does it mean when an individual in a country is so frustrated with banking that he tries to start his own, taking on the challenges, personal risks, mind-numbing paperwork and legal battle of trying to offer a service that’s better, simpler and more personal than what the banks offer?
Dave and his, Bank of Dave – sorry, “Bank on Dave!” – signals that the banks have overshot their market. Like Christensen’s classic innovator’s dilemma the banks are adding “features” and services and innovating for the top of their market. And for arguably the first time in recent years they’ve left such a large gap, such an unmet need, at the bottom of the market and have so greatly missed what most people really need that Dave and initiatives like his open the door for a new type of bank to emerge. One that’s far cheaper, with far fewer features but delivers what customers really value: direct personal relationships.
Of course what Dave is doing is nothing new to anyone familiar with microfinance. It’s a story being told in Africa, Asia, Eastern Europe and Latin America over the last decade. Yet the fact that it’s now happening in the UK as well seems to indicate a bigger trend than just the microfinance movement. A trend in getting back to the grassroots approach of banking. A counter-movement to the events of 2008 and to the Too Big To Fail problem.
The story of Dave’s bank is highly recommended viewing of understanding what microfinance and banking is really all about: people.