Society seems to have lost faith in the traditional financial services business model – from government and regulators to depositors and borrowers. While there was strain on banks’ credibility before the global financial crisis, the events of the crisis and subsequent disclosures seem to have caused trust to run dry. Politicians and consumers are angry at the lack of clarity in operations, as well as in the pricing of the products that impact them directly. Banking is seen as a grudge purchase proffered by a faceless wall of mainly untrustworthy “suits”.
At the same time, technological advances have moved power to the consumer through increasing disintermediation of banks, value-based intermediation and the ability to access DIY financial services from multiple platforms. There is a growing understanding of the necessity for sustainable thinking in both conduct and in the products and services we use. This thinking is also pushing the desire to understand exactly where invested money is being put to use. On an institutional scale this is seen in the Principles for Responsible Investing (PRI). On the street, we believe people want to be able to do good by investing their money with someone who is doing good with it. This is especially true in South Africa, one of the most financially unequal societies in the world. Customers are becoming more decisive and independent at the same time as they are asking more from banks.
Water Financial: water flows.
At Water Financial we believe there is a space in the South African financial services arena for a company motivated by principles of trust, transparency and sustainability, as well as profitability. Internationally, this is not a new idea – the 10 best known sustainable banks in the developed world have assets of around $30 billion. These commercial, growing banks focus on financing environmental projects, social entrepreneurship and community businesses that, in a country like South Africa, and a continent like Africa, are sorely needed.
Water will connect savers and investors who want to change the world they live in for the better with companies doing just that. We aim to be transparent and ethical about pricing, who we do business with and what our customers’ money funds. Not only will we walk the sustainability talk in our own operations, we will help our customers achieve their own sustainability goals while offering a level of professional service that amazes.
We will focus on servicing the affluent, socially aware market in the form of individuals, businesses, charities and retirement funds. While we intend to have a small physical presence, distribution will happen remotely as much as possible. Depositors will be able to have a say in what their money funds, directing funding organisations that are creating social, environmental or cultural benefits. Our model is focussed on generating positive change where it matters, delighting our customers while generating a reasonable return for our shareholders.