I didn’t do any research when I opened my first student bank account. As I saw it, there were only two realistic options for me. St. Ives had two big banks – Barclays and HSBC. My parents had accounts at both; I had gone with them as they ran errands when I was a child so both had a familiarity to them. They felt stable, permanent, dependable, and trustworthy. All terms that a bank should elicit when its clients think about them.

At 17 I could not imagine caring at all about the impact of my banking choices on the wider world. I didn’t really have a sense of what purpose banks served other than being a safer place to keep money than under the mattress, or helping people get on the housing ladder with mortgages.

A lot has changed since I opened an HSBC account. Students today are different. The world is different. Your options and values are different. And crucially, our access to information is different.

Gen Z and Gen Alpha are consumers that care. All the polls and data suggest that, more than any prior generation, these are the generations whose consumer choices are driven by issues of representation, diversity, and clear ethical stances from the companies they consume the products or services of.

And these companies know it.

In the coming weeks and months, I’ll (hopefully) be writing a couple of pieces for Concrete regarding ethical consumption, and some tips on how to spot those companies that care and those just paying lip service to your concerns. Now though, I’d like to speak about the ethical dimensions of the banking choices that you are likely facing for the first time and encourage you to apply your ethical consumption lens to your banking choices too.

What about the free stuff?

One thing that you’ll be better aware of than me is all the freebies that banks and building societies will be trying to entice you through their doors with. You have likely been overwhelmed by competing claims of different banks offering different sized overdrafts, access to rail cards, commission-free currency conversion, and many other shiny and confusing things.

On this, I can’t comment. Different students from different backgrounds have different needs at different times of their studies. You may be planning to fly home every holiday season, and commission-free global currency withdrawal is your top priority. Maybe you want to explore all that the UK has to offer and a rail card will make your travel plans far easier to budget for.

The Banks

The banking industry is not for the faint hearted. In 2012, for example, HSBC was hit with a fine of $1.9 billion (yes, with a B) for serving as a conduit for Mexican drug cartels, the Iranian Revolutionary Guard Corp, and a variety of international terrorist groups including Al Qaeda.

“That was years ago,” you may think, “a lot can change in that time.” Well, I have a bit more to tell you. Reporting in 2021 suggested that, despite the enforcement action taken against them in the US and the UK, HSBC failed to disclose all the details relating to the above-mentioned laundering allegations and there may still be crimes to be investigated.

“Should have gone with Barclays.” you may be saying. Well, I’ve got bad news for you there, too. For reasons that anyone with a cursory reading of Marx will be able to explain, the bigger the bank, the bigger the ethical issues.

In 2012 Barclays and other ‘big banks’ were engulfed in something known as the ‘Libor Scandal’. Banks were found to be falsely inflating or deflating the rates at which they lent each other money to profit from trades or give the impression that they were more fiscally stable than they were. The nitty-gritty isn’t important here. What is important is that the Libor rate underpins approximately $350 trillion in interbank trades and deals which directly impact the rate at which citizens can borrow money. So much for the “free market”, eh?

From currency manipulation scandals to explicit support for the China’s 2020 ‘Security law’ in Hong Kong, and from systemic racism to the Global Head of Responsible Investing denying the existence of climate change, there is substantial evidence to make anyone concerned with ethical banking, and where and how their money is being used by their bank, to question whether HSBC or Barclays can be seen as the best place for your student loan to be sent.

In a world where values-driven consumer choices are more important than ever, it’s crucial to apply that same lens to your banking decisions. Before choosing a bank, consider not just the perks but also the ethical implications of where your money is going and how it’s being used.

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