Welcome to our first update of 2020.
We're thinking positively about the weather changing for the better, the lighter nights and moving forward on our application to bring you a bank for the South West.
As always we have lots to update you with - so sit back and enjoy the read!
Head of Membership & Engagement
This time last year we were in fundraising mode and by the end of March we had succeeded in raising over £500,000 in our Founder Share Offer. I am pleased to report that we have delivered all the activities and goals set out in the Offer Document other than completing the next round of investment, and once again we are in fundraising mode – of which more later.
In little less than a year we have covered a huge amount of ground, making good progress on building the detailed business plan and entering the pre-application process with regulators.
There is still a long way to go. As we like to say, it is reassuringly difficult to start a bank in the UK! We have revised the project timetable based on updated advice on the estimated current length of the regulatory process. We expect to have a much clearer picture of regulator feedback well before the end of 2020 which will enable key operational, recruitment and investment decisions to be taken to lead to a provisional licence in 2021 and a full public launch in 2022.
Meanwhile, we are delighted to have been awarded an investment readiness grant of £200,000 from the Economic Justice Program, part of the Open Society Foundations. Open Society is active in more than 120 countries around the world, awarding grants to promote inclusive and vibrant democracies.
The Economic Justice Program was launched in 2019 and works globally to create economic opportunities for those who face systemic discrimination or exclusion, with the purpose of supporting Open Society’s core mission of promoting open, inclusive, and democratic societies across the world. In pursuit of this mission, the program makes grants to civil society organizations and movements and invests in businesses that have a positive social impact.
The investment readiness grant is made with the intention of considering a further investment in shares provided we meet certain conditions. One milestone tied to the grant is that we raise an additional £200,000 of share capital. So in order to take advantage of this great opportunity to leverage private investment into the region, we are extending the terms of the Founder Share Offer for any new investment prior to 30th June 2020. The restrictions on the type of investors who are permitted to buy shares continue to apply (institutions, high net worth and sophisticated investors). If you would like to discuss this opportunity or have any other questions please do not hesitate to get in touch.
The need for a mutual bank in the region becomes ever more evident - with further banks announcing closures in recent weeks across the South West. Around 400 bank branches will have closed since 2015 in this region alone!
The team have been researching the type of customers that we aim to appeal to, as well as ensuring that there is a large enough market for us to operate in. We reveal a bit more later in this newsletter but one point deserves a mention to show how the Westcountry is not like the UK as a whole. While only 5.7% of small and medium businesses in the UK are in agriculture and fisheries, in the SWM region it is 14.4%. We don’t care if some treasury economist says we don’t need farmers – this is a key sector for us and the lifeblood of the countryside!
We are really excited to share with you a fresh new approach to our branding and imagery that will stand us in good stead for the future. It is as a result of your feedback in our survey - so thank you for all of your comments and voting.
Thank you as always for your ongoing support - the coming months will be a key period for South West Mutual in gaining momentum and investment towards realising the plan to bring our region a community bank fit for the future.
We started work on our new identity last year and whilst we want a brand that is fit for a bank (if we are granted a licence) we wanted something that we could learn to love now with our existing name.
We have worked closely with Tom Browning and looked at many iterations that truly reflect our region, what we stand for and something that is fresh and modern.
We also asked you to share your thoughts on names for the future - it was clear from your feedback that it had to represent the region and what we do. After much discussion our new name once we are authorised will be Bank South West.
Until that time we will continue to be known as South West Mutual - but you'll start to see a change in our branding very soon.
Our custom brand device – The Pebbles – is inspired by the historic coastline that encircles the four counties we serve. The colour palette will be consistent and unique to the brand along with a variety of fonts that soften and make the imagery look fresh and modern.
The colours are not representative of the county flags that we have used on the current branding, but it will give us the ability to use different colours to identify the four counties of our region visually.
*We are not currently a bank and these are impressions of how our identity may look in the future if we are granted a licence.
We know that people will feature strongly in our identity and imagery. We want our brand to represent the region and its people and that we are for people like you.
When you can identify with people like you in the places that you live and love across Cornwall, Devon, Dorset and Somerset, we think it becomes more meaningful.
So, watch this space - we will be starting to use the new branding over the coming weeks and months across our website, social media channels and communications.
We've spent much of our time researching for our regulated business plan who South West Mutual will appeal too, once we are granted a licence, and their needs from a bank. It also has helped us to shape the product offering available to our customers of the future.
To put some spotlight on where our thinking is, we wanted to share with you what our research tells us about customers and their needs in the South West. We think it will resonate with many of you, your friends, family and people in your community.
This edition we focus on unregistered businesses - which covers businesses that are below the VAT threshold of £85,000 and have no employees.
We know that across the region there are 190,800 of these types of businesses - they make up 60% of all small business in the South West (the national average is 55%).
A small proportion of these are partnerships but they are mostly sole traders. Our survey revealed that 1 in 12 of people are using their personal account for business transactions and so their businesses are invisible to their bank. We want to help your business succeed no matter how big or small, and we think that sole traders deserve more attention.
Within this broad group there is a need for branch access and cash handling as well as wanting to have a bank whose values are aligned to their own.
Our research tells us that they require the following to help them run their business:
By understanding these customers needs, it helps us to build a product offering that meets their needs, as well as understanding what our mobile, online and branch offering needs to look like.
We have extensively researched competitors offering to these customers and therefore can build an offering that is both value adding, competitive and attractive enough for people to change their bank.
We engage with, meet and collaborate with many people during a week.
You can keep up with our engagement by following us on social media - we thought we'd share some of those collaborations here for you to read too.
If you think you have a topic or event that we could engage with - then be sure to let us know.
SWM along with Cornwall Council arranged an event at the Eden Project in January.
Supported by the Grantham Institute at the London School of Economics, the event was focused on the transition for businesses in the South West to a carbon neutral economy by 2050.
You can see the press release from this event here.
Our friends in Wales are working on their own version of a mutual ethical bank for the whole of Wales.
Mark Hooper, who is leading the team at banc cambria said -
“It’s great feeling like you’re part of a movement and there are others with a similar ambition; to develop a true challenge to the big banks - a challenge that is borne from the communities we’re set to serve."
You can view the video of Mark speak at 'Yes Cymru' about their plans, by clicking here.
The start of the new year normally causes people to make resolutions – get fitter, lose weight, read more, learn a new skill, drink less, etc. Like the rest of you, I’ve been there and got the t-shirt. But this year, I already have my 2020 challenge. I’m running the London marathon in April and I’m beginning to realise the enormity of the task.
Having covered few miles in 2019 due to a bad ankle injury, I got started by downloading the BBC’s “couch to 5k” app in November and have just finished the 9 week course. In the office, Annabel and Adrian both raved about it and I can see why. It was a huge blessing as it motivated me to get out at least 3 times a week and literally go from sitting on the couch to running 5k with relative ease.
Progress has been encouraging – from a virtual standstill I’m now able to run 8 miles, I’m following a 16 week “beginners marathon” training plan and am bang on course for the big day.
The parallels with our journey to become a bank continue to show themselves. Over the past couple of months we have engaged with potential technical partners, talked to potential investors, refined our customer and product propositions and conducted some in-depth target market research. We’re putting the building blocks in place in order to make it to the start line.
I’m running to raise money for my part time employer – Christians Against Poverty, a debt advice charity. Many of my clients are being affected by punitive overdraft charges and branches disappearing from our rural high streets. SWM really could be an answer to help people caught in these situations. Over the past few weeks, I have been able to support my first client in becoming debt free and work with another who has been at risk of having his home repossessed. It’s vital and rewarding work.
One of the areas of our People & Culture plan that we are passionate about is ensuring that we have a rich mix of diversity across the company.
We have had feedback that when you look at our website, it would appear that we have a gender bias! We don't - but we are working hard on the attraction and recruitment of future roles to ensure that we have a diverse team. We know that a diverse team will create better outcomes for our team - and our future customers.
We aren't actively recruiting at the moment - but be assured that diversity and inclusion is, and will continue to be an important factor in the future make up of the team.
We hope you've enjoyed the update - as always we like to hear what you think, so please feel free to make contact with us if you want to know more. Our next update will be in May.
If you are interested in investment opportunities for South West Mutual - then please get in touch with us at email@example.com
Thanks for your support.
South West Mutual Limited is Co-operative Society 4451 registered under the Co-operative and Community Benefit Societies Act 2014
Registered office: Broadwalk House, Southernhay West, Exeter, Devon EX1 1TS Tel :01392 984004
* Disclaimer: We intend to apply for a banking licence to the Prudential Regulation Authority and Financial Conduct Authority. We are not yet authorised as a bank so please do not take any information on this website as an invitation or inducement to apply to South West Mutual for any banking services or products.
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