MSE Guide: Ethical banking

MSE_Rosie

This is the place to discuss our new Ethical Banking guide. 

We'd love to hear your thoughts, personal experiences, and general feedback. 

If you haven’t already, join the forum to reply. If you aren’t sure how it all works, read our New to Forum? Intro Guide.

gsmh

Ethical banking is currently a bit of a compromise. The most ethical bank is said to be Triodos and appears on paper to tick all the boxes. Unfortunately you will have a banking experience which seems very sub par. "Faster" Payments to and from the current account nearly always take a couple of hours to appear, and often outgoing payments end up languishing in a pending situation for 24 hours or more and necessitate a call to have them released. Triodos does not support Google or Android Pay, even though it would be far more ethical to have an optional physical card and focus on the use of NFC payments. Cash withdrawals would be the main problem here though. You could use a Curve card linked to your Triodos account to achieve contactless payments, of course.

Triodos has also been implicated in Cambodia's microcredit scandal. Certainly not the act of an ethical financial institution.

Unless you're happy with what Triodos offers, it's better to go down the list of ethical banks until you arrive at one that offers the perfect compromise - Cumberland Building Society is excellent, but is only available to those living within its catchment area. The Co-operative Bank sounds good until you look at its dire customer service and the fact it is owned by a hedge fund.

Some of the newer banks like Starling, Monzo, Metro etc. are considered ethical in as much as they have not been around very long, and never when investing in things like fossil fuels was an acceptable thing to do. Their fingers are unsullied - not necessarily because of a genuine ethical policy though.

Times are changing, and most banks are moving away from certain investments - particularly fossil fuels - so finding a compromise is much easier these days than it was.

For a lot of people, Nationwide is probably as close as it's going to get.

Any thoughts? The article this thread links to sums it up pretty well and I can't imagine many disagreeing with how it explains ethical banking.

boingy

Mostly, "Ethical Banking" is an oxymoron. There is almost always an unethical connection to be found if you look hard enough. And, of course, every bank and organisation wants to be seen to be more ethical so they work hard to promote the "cleaner" side of the business whilst sweeping the other stuff under the carpet. Yes, I'm cynical, but so are the practices of most businesses.

gsmh

boingy said:

Mostly, "Ethical Banking" is an oxymoron. There is almost always an unethical connection to be found if you look hard enough. And, of course, every bank and organisation wants to be seen to be more ethical so they work hard to promote the "cleaner" side of the business whilst sweeping the other stuff under the carpet. Yes, I'm cynical, but so are the practices of most businesses.

To an extent I agree, which is why you try for a compromise. If bank A is 80% into unethical practises and bank B is 20% into unethical practises someone who cares about such things might prefer bank B, everything else being equal. Your post suggests to me it's not worth bothering. It's like not caring where you eat because every restaurant will have some issues with hygiene and food safety. Most of us would avoid a restaurant with a dire record and prefer one with only minor issues.

I know some people don't care. I have a friend who buys what she wants regardless of how it might affect the planet - she has no concerns about single-use plastics, or bi-products of the petro-chemical industry. I know there are many who don't care about what their money is used for or how their money finances nefarious concerns, as long as they get a good return and the product suits them.

I get the cynicism. As a gay man I really dislike the way companies jump on the LGBT band-waggon, rainbow flags all over the place. It's clearly about making money, little else. Ethical banking can be like this too. That's why it's important to sort the wheat from the chaff. I don't think there's an argument to dismiss everything and carry on regardless though.

pridehappy

I’m always someone who’s interested in being as ethical as I can and banking is no exception to this. Larger amounts being invested can have a detrimental impact on the environment and even though literally none of the financial institutions are perfect, some are much better than others. For example, HSBC and Barclay’s are dreadful when it comes to environmental scores and are the only 2 main UK banks (other than Santander) who still invest in environmental destruction.

As someone who used to use the Cumberland Building Society as a child, I can confirm it was (and still is) very outdated and digital banking although offered is dreadful. Most likely sounds like a similar experience to Triodos. For savings, it’s most likely your local building society will also be relatively ethical.

Nationwide Building Society is mostly the best bet for a mainstream bank which is at least partially ethical. It ticks all of the environmental boxes. It’s not really known as being ethical completely, although on the environmental side Virgin Money also ticks all of the boxes.

It’s only in the past few months that main UK banks have decided to cancel environmental destruction as soon as possible such as Lloyds Banking Group and NatWest Group, so we do seem to be moving forward.

There’s another website with specific ratings for each financial institution which I believe you might find useful.

https://thegoodshoppingguide.com/subject/ethical-banks-building-societies/

WillPS

pridehappy said:

It’s only in the past few months that main UK banks have decided to cancel environmental destruction as soon as possible such as Lloyds Banking Group and NatWest Group, so we do seem to be moving forward.

Bit sensationalist, no?

Agree that it's a good thing either way.

For me the whole ethical banking thing has been a bit of a red herring. Most of my banks pay me far more than they could possibly make from me directly. (No way Halifax are making £15/month from 3 Reward accounts with an average balance of £1 each, for example!)

gsmh

pridehappy said:

As someone who used to use the Cumberland Building Society as a child, I can confirm it was (and still is) very outdated and digital banking although offered is dreadful. Most likely sounds like a similar experience to Triodos. For savings, it’s most likely your local building society will also be relatively ethical.

Nationwide Building Society is mostly the best bet for a mainstream bank which is at least partially ethical. It ticks all of the environmental boxes. It’s not really known as being ethical completely, although on the environmental side Virgin Money also ticks all of the boxes.

It’s only in the past few months that main UK banks have decided to cancel environmental destruction as soon as possible such as Lloyds Banking Group and NatWest Group, so we do seem to be moving forward.

There’s another website with specific ratings for each financial institution which I believe you might find useful.

https://thegoodshoppingguide.com/subject/ethical-banks-building-societies/

Your comments on the Cumberland Building Society are interesting. Not living in its catchment area I've had no direct experience. Perhaps I'm not missing much!

I have banked with Clydesdale Bank and liked them, but I really can't abide the dreadful Virgin brand they now use.

It really is a case of thinking of a financial institution as a package of good and bad traits, and deciding whether for you the good outweigh the bad. As I said earlier, even the much heralded Triodos Bank has issues quite apart from its dire service.

Thanks for the link, I will have a look this afternoon. The Ethical Consumer Magazine is useful in this regard too.

Organist

gsmh said:

pridehappy said:

As someone who used to use the Cumberland Building Society as a child, I can confirm it was (and still is) very outdated and digital banking although offered is dreadful. Most likely sounds like a similar experience to Triodos. For savings, it’s most likely your local building society will also be relatively ethical.

Nationwide Building Society is mostly the best bet for a mainstream bank which is at least partially ethical. It ticks all of the environmental boxes. It’s not really known as being ethical completely, although on the environmental side Virgin Money also ticks all of the boxes.

It’s only in the past few months that main UK banks have decided to cancel environmental destruction as soon as possible such as Lloyds Banking Group and NatWest Group, so we do seem to be moving forward.

There’s another website with specific ratings for each financial institution which I believe you might find useful.

https://thegoodshoppingguide.com/subject/ethical-banks-building-societies/

Your comments on the Cumberland Building Society are interesting. Not living in its catchment area I've had no direct experience. Perhaps I'm not missing much!

I have banked with Clydesdale Bank and liked them, but I really can't abide the dreadful Virgin brand they now use.

It really is a case of thinking of a financial institution as a package of good and bad traits, and deciding whether for you the good outweigh the bad. As I said earlier, even the much heralded Triodos Bank has issues quite apart from its dire service.

Thanks for the link, I will have a look this afternoon. The Ethical Consumer Magazine is useful in this regard too.

I have banked with the Cumberland for years and find them excellent! So I think you are are missing out! I thought your comment "Perhaps I'm not missing much!" was rather strange as you said you had no direct experience of them.

WillPS

Organist said:

gsmh said:

pridehappy said:

As someone who used to use the Cumberland Building Society as a child, I can confirm it was (and still is) very outdated and digital banking although offered is dreadful. Most likely sounds like a similar experience to Triodos. For savings, it’s most likely your local building society will also be relatively ethical.

Nationwide Building Society is mostly the best bet for a mainstream bank which is at least partially ethical. It ticks all of the environmental boxes. It’s not really known as being ethical completely, although on the environmental side Virgin Money also ticks all of the boxes.

It’s only in the past few months that main UK banks have decided to cancel environmental destruction as soon as possible such as Lloyds Banking Group and NatWest Group, so we do seem to be moving forward.

There’s another website with specific ratings for each financial institution which I believe you might find useful.

https://thegoodshoppingguide.com/subject/ethical-banks-building-societies/

Your comments on the Cumberland Building Society are interesting. Not living in its catchment area I've had no direct experience. Perhaps I'm not missing much!

I have banked with Clydesdale Bank and liked them, but I really can't abide the dreadful Virgin brand they now use.

It really is a case of thinking of a financial institution as a package of good and bad traits, and deciding whether for you the good outweigh the bad. As I said earlier, even the much heralded Triodos Bank has issues quite apart from its dire service.

Thanks for the link, I will have a look this afternoon. The Ethical Consumer Magazine is useful in this regard too.

I have banked with the Cumberland for years and find them excellent! So I think you are are missing out! I thought your comment "Perhaps I'm not missing much!" was rather strange as you said you had no direct experience of them.

They're going off @pridehappy 's  description. Like @gsmh I've always been intrigued by Cumberland's offer but to be honest going by what N&P were like and even players like Triodos (who have the temerity to charge their customers for an experience which is very subpar) I can well believe it is not without limitations. Even The Co-operative Bank is guilty of 'early online banking' style frustrations which all other high street counterparts have solved. 

How do you find the Cumberland online banking and app (if they have one)? How quickly do payments happen?

pridehappy

WillPS said:

Organist said:

gsmh said:

pridehappy said:

As someone who used to use the Cumberland Building Society as a child, I can confirm it was (and still is) very outdated and digital banking although offered is dreadful. Most likely sounds like a similar experience to Triodos. For savings, it’s most likely your local building society will also be relatively ethical.

Nationwide Building Society is mostly the best bet for a mainstream bank which is at least partially ethical. It ticks all of the environmental boxes. It’s not really known as being ethical completely, although on the environmental side Virgin Money also ticks all of the boxes.

It’s only in the past few months that main UK banks have decided to cancel environmental destruction as soon as possible such as Lloyds Banking Group and NatWest Group, so we do seem to be moving forward.

There’s another website with specific ratings for each financial institution which I believe you might find useful.

https://thegoodshoppingguide.com/subject/ethical-banks-building-societies/

Your comments on the Cumberland Building Society are interesting. Not living in its catchment area I've had no direct experience. Perhaps I'm not missing much!

I have banked with Clydesdale Bank and liked them, but I really can't abide the dreadful Virgin brand they now use.

It really is a case of thinking of a financial institution as a package of good and bad traits, and deciding whether for you the good outweigh the bad. As I said earlier, even the much heralded Triodos Bank has issues quite apart from its dire service.

Thanks for the link, I will have a look this afternoon. The Ethical Consumer Magazine is useful in this regard too.

I have banked with the Cumberland for years and find them excellent! So I think you are are missing out! I thought your comment "Perhaps I'm not missing much!" was rather strange as you said you had no direct experience of them.

They're going off @pridehappy 's  description. Like @gsmh I've always been intrigued by Cumberland's offer but to be honest going by what N&P were like and even players like Triodos (who have the temerity to charge their customers for an experience which is very subpar) I can well believe it is not without limitations. Even The Co-operative Bank is guilty of 'early online banking' style frustrations which all other high street counterparts have solved. 

How do you find the Cumberland online banking and app (if they have one)? How quickly do payments happen?

It isn’t the worst app by far and does complete the everyday functions of an app from what I can see.

Someone I know continues to use the Cumberland for daily banking. From what I’ve heard from them, the customer service itself isn’t bad at all when you need to call them and the branch service provided is far superior to main street banks. It’s only if you’re looking for the “more advanced” banking you’re going to struggle. For example, you need a Cumberland Plus account for 6 months with funding before they even consider you for an overdraft. It’s part of the terms & conditions that it must be your main current account so unsure if they won’t accept you if you have others when doing the credit check. Faster payments take about 2 hours to send and appear, which is a little longer than main banks. It also isn’t part of the account checker service (forgotten its name, when you enter sort code / account number / name and it confirms you are sending to the correct account). 

Here’s a link to the App Store page which provides some more details, but it’s by no means advanced. 

https://apps.apple.com/gb/app/cumberland-mobile-banking/id715482935

Lions_89

Ethical banking is really not something that interests me, I did look at Triodos bank, but then the reviews were mixed. They outsource their card management, the payments are slow, the app doesn't have many common features. But the main reason is that the big banks are now changing their policy to become more ethical. While they certainly may not be as ethical as Triodos or Co Op, they are on the path. That is enough to keep me. 

And then you have the other ethics, a bank makes money from you borrowing from them or from the account fee. An account fee is perhaps acceptable, but any bank which makes a profile from borrowing is not ethical in my opinion. Not forgetting, payments will be processed by Visa and Mastercard, they most likely use a big bank for the bank end payments etc. So in reality you are not really avoiding the big boys. Barclays has its hand in most of the payment systems. There is no escape. Many of the small banks do. Metro Bank uses Barclays for it's payments.