Avon Mutual appoints its CEO
The board of Avon Mutual is delighted to announce that it has significantly expanded its team in recent months and most importantly appointed Chris Weller as its CEO to take Avon Mutual through its licensing, build and launch process and to lead the bank as it pioneers inclusive and sustainable regional banking for the West Of England. This news comes hard on the heels of other exciting news we updated you on in our recent new year blog in terms of progress with fundraising and our bank license application process. In addition to Chris joining the team we are delighted to announce two other new members of the team including Ewan Silver as our newest board member and Trish Norman as Head of Operations. Cheltenham based Ewan is the CTO and Co-founder of 11FS, a leading fintech consulting and design agency where one of the things he's been responsible for is building Mettle, the SME challenger current account 11FS delivered from scratch for RBS. Prior to 11FS his past roles include CTO and early technology designer for Nutmeg as well as as a founder of the challenger bank that eventually split to become Starling and Monzo. Trish's career has included roles as Group Head of Business Delivery, solutions & Transformation at One Savings Bank and Head of Mortgage Operations, Collections and Recoveries at Principality Building Society spanning many years. Trish has a wide experience of leading teams to build and improve areas directly servicing customer needs.
In conversation with our new CEO Chris Weller
We thought it would interest our followers to understand what attracted Chris to join Avon Mutual and so we’ve written this blog as a conversation between Chris and Avon Mutual’s Founder and NED Jules Peck. Jules: First off Chris I’d like to reiterate how pleased we are to have you join the team. Perhaps you can tell us a bit about your journey to joining our team, where you’ve worked in the past and so forth? Chris: Thanks Jules. First off, I am absolutely delighted to be joining such a talented and driven team that believes as much as I do in Avon Mutual's ability to become a pillar of a thriving West of England regional economy and an organisation that nurtures inclusive and sustainable growth. Supporting participation and engagement with the local economy, and facilitating financial inclusion and improved financial health for individuals and businesses is a big challenge and I’m very proud to be able to lead the business as we build toward these aims. Having started out with GE Capital in Bristol, my career has been spent predominantly in senior Commercial roles across the FS sector, with some very fond years in between at Tarmac, the construction materials business, as we formed a JV with Lafarge. After that I joined the challenger bank Aldermore as Commercial Director. That was a fascinating period of my career as we scaled the business and completed an IPO. Following my experience at Aldermore I was keen to get into earlier stage businesses and joined the executive team of an SME focused technology business, Geniac, before joining a peer to peer lender. Working at those businesses we were highly focused on the customer proposition and how we scaled alongside great enabling technology. Most recently I had the opportunity to join Allica Bank as part of the executive that successfully applied and gained regulatory approval for a new SME bank. Having gained our license in September 2019, we launched the business to the market against some clearly challenging headwinds. However, with a great team, great technology but more importantly a well defined proposition that really meets an under-served need for UK SMEs, the business has gone from strength to strength providing much needed support to UK businesses when it has never been needed more. I’m delighted to have the opportunity to bring my experience to Avon Mutual and further deepen the alignment of my personal values with my career here. Jules: We are building a very different sort of bank to the mainstream UK banks, a ‘stakeholder bank’, community owned and focused on a mission around inclusive and sustainable regeneration for our region. Can you tell us what attracted you to this mission and motivated you to join us? Chris: I’ve spent all my career in business, much of it with Banks or fintech businesses and whilst I’ve greatly enjoyed my experiences, I feel strongly that a new way of doing things, particularly in the banking sector, is long overdue. The Avon Mutual mission of supporting the development of an economically resilient, thriving, inclusive and sustainable economy for the region I love is what has drawn me to join the team here at Avon Mutual. Our future customers are facing huge challenges in their lives, of course due to the pandemic, but largely due to challenges they were encountering before this took place. A number of these challenges should be eased by the banks, yet with a focus largely on shareholder value, it is often the individuals and small business customers who have to bend to the way the banks work rather than the other way around. Additionally, there are large swathes of our community who are either actively or passively discouraged from being a customer of the larger banks and in time we hope to help these and the rest of the West of England by building a bank that places inclusivity and sustainability at its heart. My wife grew up in the north of our region in Cheltenham, and having met in Bristol, we lived in the region for many years. Whilst our careers have taken us far and wide we have both missed the West of England and we are delighted that Avon Mutual is giving us the opportunity to move back here. I feel we have so much to offer in the West of England both in terms of identity and community as well as a vibrant high tech, creative industry landscape and a diverse mix of rural and urban economies. So I think it's fitting that the first of these groundbreaking new banks will emerge in our region and I’m thrilled to be part of the bank’s journey. Jules: Perhaps you can outline for our readers what you see as the shape and timeline of the tasks ahead as we move towards licensing and launch? Chris: I’m joining as CEO at a time when the team has already made huge progress. We continue to progress through the banking license process, we’ve raised over £1.7m from people across the region as well as from foundations and a number of our region’s Local Authorities. We have cross party support from MPs, Mayors and councils across the region and it really feels like we have the wind in our sails. However, it is reassuringly difficult to get a banking license and the process we are going through, with highly detailed and iterative review by the PRA and FCA regulators of our business and financial models, is without doubt the very highest level of due diligence any start-up business faces in the UK. Having been part of the process of licensing for Allica Bank I know it’s not for the faint hearted. Currently we are focused on a number of areas including our capital and liquidity planning, the development of our technology stack and critical work on our proposition to future customers to ensure we really are meeting their needs. As we continue to build towards launch we plan to follow up on a recent highly successful investment raise with another investment round in early May. All of this work and more is required as we continue our progress through the regulatory approval process. In the ten years after we launch we will have lent over £1bn to individuals and businesses in the local economy and supported over 80,000 customers across the West of England. At the same time the wider movement we are part of sees 17 other banks across the UK looking to achieve their own regional missions. Jules: We have long made the case for our sort of banks being crucial and missing from the UK financial ecosystem and that our sort of stakeholder banks are common in many other countries and play a key role in their economies. Can you say a bit about this and what you feel makes us different? Chris: It's striking how unusual the UK banking landscape is compared to most other OECD countries. The UK has an oligopoly of 5 major banks which control the majority of the market. This is very atypical because in most other countries there is a diversity of hundreds of much smaller banks, many of which are not profit-first banks but are what is known as ‘stakeholder banks’ and are often also regionally focused. Salisbury already has such a bank - that is Salisbury, Maryland in the US - which has its own regional bank with four branches. Salisbury, N. Carolina also has its own bank, an award-winning bank that, like so many of its smaller peers, had no TARP bail-outs post 2008 - unlike the bigger banks. So why not Salisbury Wiltshire? And what about Bath? Bath in Maine has a 165yr old mutual savings bank serving mid coast and southern Maine and lending £0.5bn to the local economy, with 130 employees. And Bath UK’s German twin town Braunschweig has the Braunschweigische Landessparkasse (BLSK), a savings bank which dates back to 1765 with over 100 branches in its region, over 240,000 retail and business customers and €12bn in deposits. Bristol’s twin town Bordeaux is served by its own regional co-operative bank Banque Populaire Aquitaine Centre Atlantique with 217 branches, 661,000 customers and €12.2bn deposits, with a strong focus on sustainability, green retrofit loans, green mortgages, eco-innovation and community housing. Clearly we want to learn from the best of these banks and combine those lessons with the very latest technology and thinking to support our customers in the most suitable ways to address their specific needs. Some might ask ‘so what? Why might we need these sorts of banks here?’ Well for a start the lack of diversity in the UK banking landscape is bad for the consumer. But we don’t just need more mainstream banks. The overwhelming evidence shows that stakeholder and regional banks are far better at delivering a number of key economic, social and environmental outcomes for their regions that big mainstream banks just cannot deliver. Firstly, this relates to the way stakeholder banks put their assets and their lending into the ‘real economy’ rather than the ‘speculative economy’ the big banks are aligned to. This means far more lending to SMEs and start-ups and to things like sustainable solutions to climate change, green mortgages and so forth. These banks in places like Germany stepped into the SME lending gap left by the big commercial banks in 2008 and in countries where these sorts of banks predominate there has been far better bounce-back lending during the COVID pandemic. This builds resilience to market shocks which distant profit-first and speculation oriented big banks are unable to bring. Being far closer to their markets than the big banks means these sorts of banks are operating with far more information than a distant multinational bank based on chatbots and algorithms. These banks are also far better at keeping local money flowing in the local economy and where they exist there is a far better regional distribution of economic development compared to the UK, where much of this is focused on London and the South East. Currently approaching half of SME deposits in our region flow out of our region - with a regional bank like ours that money would stay in the region being lent to develop a more vibrant economy. Another thing the stakeholder banking model supports is a focus on financial inclusion and supporting those who suffer from the poverty premium of not having access to basic banking facilities such as direct debit. According to work carried out by Bristol University this costs low-income households many hundreds, and in some cases, thousands of pounds a year to access their basic services. This focus on building local economic resilience and a thriving inclusive and sustainable economy is at the heart of our mission at Avon Mutual. Jules: This all sounds very nice but I can imagine cynics would suggest that smaller banks like ours might struggle to gain market share and to survive? Chris: Yes, well in fact the evidence shows that is just not the case. Bigger is not always better. The reliance on the ‘too big to fail’ and ‘too interconnected to fail’ banking world builds structural instability into our economies. The idea that these bigger banks are more stable is a myth. In fact, in places like Germany the smaller regional stakeholder banks had a far better post 2008 than the big banks and indeed brought resilience to their markets when the big speculation-based banks crept into the shadows post 2008 to lick their wounds. With the possibility of future economic turbulence for the UK and the potential long-tail of events like Brexit and COVID-19, we badly need banks which can ‘build back better’ and add more resilience into our markets - something big banks just can’t do. Our business model is predicated on a prudent and sensible growth strategy based on a diverse set of products and customers and I am confident that we will be building a very stable business best able to serve the needs of our region over the long-term. Jules: Another focus for us at Avon Mutual is increasing trust in banks. How might Avon Mutual be different and more trusted? Chris: Rebuilding trust in banking is something I care deeply about and you are right it's a key focus for us. For a start our unique governance system means that our customers are our shareholders and power is distributed by one member one vote not by shareholding. So our smallest shareholders, with maybe just one share, get as much say in how we operate as a major institutional investor. In addition, our Board is directly accountable to our members. In terms of our business model, unlike the big banks where so much now is automated, humans are in charge at our bank and we are relationship driven and immersed in our locality. We don’t use our assets for financial trading or speculation, which is often where the majority of big banks focus. And staff won’t have sales incentives to cross-sell financial products. Again, unlike the big banks, we will operate a simple, honest, transparent charging structure, practice fairness in all we do, be a real living wage employer and are aiming for a maximum 1-15x pay ratio top to bottom for our staff compared to the big banks where it's more like maybe 300-400x. However, trust is built over time and through experience, not words. All of the above will be right at the heart of our culture, alongside a genuine focus on protecting customers from harm and supporting them with real relationships that allow them and our region to prosper. Jules: Most of the new ‘challenger’ banks launching currently, including ones like Monzo and Starling, are launching app-based models without branches, and focusing mainly on only one product like a current account. Why is Avon Mutual eschewing this approach - why is it important to be a “full service” bank, with a wide product suite and a branch network? Chris: Access to financial services has clearly moved more and more into the digital space as smartphone usage has exploded, 4G/ 5G coverage has expanded and with the huge effects of lockdowns throughout the pandemic. There has therefore been some fantastic innovation across the banking landscape with respect to customer offerings in the digital space and I personally welcome this is a fantastic evolution of the market. And with a fintech guru and pioneer on our board with Ewan now joining our team we plan to be near the cutting edge in terms of technology. We can do that partly because we don't have any of the IT legacy issues holding the big banks back from innovating. However, I have seen first hand the impact on businesses and individuals of the increasing trend toward branch closures by the large banks and some of the limitations of the newer digital challengers. Some of these will inevitably be overcome as the digital challengers evolve their models but it is no coincidence that many are looking at how they service customer needs in the physical world and see restrictions on how they serve many customer groups due to online limitations. In my view there is a real and pressing need for a bank like Avon Mutual to sit alongside these businesses, and the large banks, as a genuine alternative. A bank that places inclusive financial services, future sustainability and community resilience at its heart as we ‘build back better’ in the West of England. Doing that with physical locations but with a digital approach also is absolutely what we intend to do in order to best serve our customers. Jules: Thanks Chris. It's been great to have you share your vision with our followers. We hope our followers have found this update useful and please do continue to follow our progress and do reach out if you’d like to talk. All the best for now