New Bank Opens with a Different Approach to Paying staff, is it Better?
This week, `Free Man` bank has opened, it is like any other bank except for one thing; this bank pays its workers differently from any other in Britain. The hope is its new approach to banking can save Britain from another financial crisis. Can it or will disaster strike again?
Most banks pay individual workers well and sometimes double their pay if they make a certain amount of money. This can give bankers an incentive to take risks, which can lead to banks losing or making a large sum of money. This is not, in the long term, a very stable approach.
Free Man bank believe that they have a better and more stable approach to banking. This is based on the way they pay their staff. Like other banks, Free Man bank pays its workers rewards depending on how much money they make. However, Free Man also reduces wages when there are major losses. The aim of this approach is that bankers will think about the long term and will not take extreme risks. Hopefully, this will reduce unstable financial conditions and the chance of another crisis.
Adam Godfrey from Free Man bank says, “I think this is a new and improved banking system because the current one has previously caused serious issues and could cause more problems in the future. We think our system will encourage bankers to think before they act.”
A banker from a rival bank says, “People clearly would prefer to work for the best paying bank, which I think shall remain us.”
Will Free Man bank prevail? Could this be the new banking model?