In the Financial Times, Michael Maslinski, who heads a consultancy specialising in the private banking, asserts that centralised decision-making has seriously de-skilled branch networks.
He refers to the ‘traditional banking skills of common sense, assessment of character, knowledge of history, how countries and cultures differ and experience of life which were routinely deployed in the past at almost every level from the boardrooms to the local branch manager”.
Mr Maslinki approves the Rabobank model, founded on cooperative principles. This bank grew from mergers of local loan cooperatives founded in the Netherlands nearly 110 years ago by enterprising people who had virtually no access to the capital market.
Unlike most other banks across Europe, its branches own its head office, which is there to serve the needs of the branches and those of the local communities in which they are based.
Another arm of the bank, the Rabobank Foundation, has been active for over 35 years in the area of micro-finance and the creation of farmer and credit co-operatives in developing countries, ‘supporting projects that promote economic participation and self-sufficiency’. The link leads to a video about its origins and current practice.
The bank’s principles read well but many readers will have serious reservations about its promotion of ‘agribusiness’ and – even more so – its ‘investment in gene technology’. References in this post are focussing on its structure alone.
Michael Maslinski ends by suggesting that the authorities should now examine the possibility of dividing our state-owned banks into regional franchises, inspired by Rabobank’s evidence that more localised control provides better risk management as well as a better service to customers.