How it Was

There was a time just over 20 years ago in the United Kingdom when the local Bank Manager and Building Society Manager had what was then known as Discretionary Power (DP).

Not only could he lend money from his Branch in his own right but his recommendation was needed for all facilities above his DP whenever a customer required it.

The Manager knew his customers, his community and what was going on in the environs of his Branch and each town had a coterie of such Managers who all shared common knowledge and many times common interests.

This fount of knowledge was gradually computerised at all the Banking Institutions during the 90’s and control was centralised and local DP’s removed.

Slowly but surely credit score systems and computer driven systems took over from the local presence and call centres went to the other ends of the earth and less and less could the customer talk to a member of staff locally about facilities required on funding.

Sales of Insurance products, credit cards etc. were now being thrust at a customer database that could be controlled by some wet behind the ears MBA or computer accountant.

In fact it all got so bad that you had 4 men at the top of 2 major Bank Groups who do not have a Banking Qualification between them.

Now with the computers you could start to run fancy leverage programmes, derivatives, hedge funds etc. and the fact that the underlying strength of any deal is the customer, the security and the repayment method was buried out of sight.

All of this was lost sight of in the mad rush for the God of Turnover and the old adage Turnover For Vanity, Profit For Sanity was completely ignored.

Future Funding

One of the best things is that we have to reshape and rethink how we do things financially and how decisions on funding are made.

Cash money has not gone it is sitting quietly in other pockets waiting to be spent, but underlying asset values have decreased dramatically and they are the fundamentals that funds are loaned against.

The basic principles of PARTS and the 3 C's were thrown out of the window over the last decade.

Purpose, Amount, Repayment, Terms and Security of the transaction and the Character, Capacity and Capital of the Borrower, Consumer or Business, were all lost sight of in the rush for short term gain.

For the future Capital values will rise again and funds will start to flow but this time hopefully with circumspection and inspection of the underlying transactions being first and foremost in the decision making process to release funds for investment and not speculation as Hedge Funds were doing.

There is a tremendous paper to be written about all that has happened in the past decade and a very interesting future view to be taken.

There is an old maxim that you should "zig when the herd are zagging" and look for the area where future growth will occur and without a doubt this is in recycling and renewable energies.

Not only will these areas create jobs and wealth they will help us save the finite resources of the Planet and give future generations a Planet worth living on and investing in.

Also the use of Bartercard with Trade Pounds creates a whole new opportunity for business to deal with business outside the currently sullied Banking World.

Best wishes to all in the future and hope springs eternal and there are great future opportunities too.

Alan Bowman, ACIB

Author's Bio: 

Alan Bowman is an Associate of the Chartered Institute of Bankers and his full profile is to be found on or

He knew Banking when it was a truly professional business and not a short term Casino operation run by computers and inexperienced MBA's with no real knowledge of the true tenents of Banking.