By Michael Andisile Mayalo
"The colonized, underdeveloped man is a man who has been deprived of his world and who has been denied a world." — Frantz Fanon.
Today's banking system operates as a modern coloniser, extracting wealth from the very individuals it claims to serve. Fanon’s insights into colonialism resonate deeply when examining the intricate and often exploitative relationship between banks and their customers. The banking system, built on principles that often favour institutional gain over individual welfare, raises critical questions about its fairness, transparency, and ethical foundations.
A fundamental contradiction lies at the heart of the banking system: banks use their customers' deposits—people who trust them with their hard-earned money—to generate profits through loans and investments. While individuals expect to have their funds safeguarded and perhaps even grow through interest, the reality is starkly different. Banks take the money entrusted to them, lend it to others at higher interest rates, and profit from the differential, all while charging depositors fees for holding their funds. This transactional dynamic mirrors the very exploitation that Fanon critiques, where the wealth of the many is siphoned off to benefit the few.
Banks often charge monthly maintenance fees, overdraft fees, and various other service charges, creating a cycle of financial dependency that disproportionately affects those already vulnerable. The banking system promotes the illusion of financial security while simultaneously locking consumers into a framework where they are penalised for their financial struggles. It raises the question: Who is truly benefiting from this arrangement?
Customers largely bear the risks associated with banking practices. When the banks falter in economic uncertainty, ordinary citizens are left to deal with the fallout. The 2008 financial crisis starkly illustrated this: millions lost their homes, savings, and jobs due to banks' reckless lending and investment practices. The subsequent bailouts, funded by taxpayer money, were a clear indicator of the systemic imbalances at play—where the failures of the banking sector were cushioned by the very people it had harmed.
The rhetoric surrounding banks often emphasises their role in promoting economic growth, but this narrative obscures the reality of their operations. By prioritising profit over the well-being of their customers, banks perpetuate a cycle of inequality. Small businesses, often seen as the backbone of the economy, struggle to secure loans while banks chase higher returns from larger, more profitable corporations. This bias leads to a concentration of wealth and resources, stifling innovation and entrepreneurship among those who lack the capital or connections to navigate the banking landscape.
Furthermore, the advent of digital banking and fintech solutions has not alleviated these issues but has often exacerbated them. While these technologies promise convenience and accessibility, they can also perpetuate exclusion. Those without access to reliable internet or technology are disadvantaged, further widening the gap between the financially literate and those left behind. The promise of innovation becomes hollow when it fails to address the underlying issues of accessibility and equity.
What, then, is the alternative? As we grapple with these systemic challenges, we must consider community-centric financial institutions that prioritise people over profits. Credit unions, local cooperatives, and ethical banks offer viable models challenging the status quo. These institutions are often more accountable to their members and prioritise local investment, fostering economic resilience within communities. We can dismantle the exploitative dynamics that characterise traditional banking by supporting these alternatives.
We must advocate for greater transparency and regulation within the banking sector. It is essential to push for policies that hold banks accountable for their practices, ensuring that they prioritise the welfare of their customers and the communities they serve. Initiatives that promote financial literacy and empowerment can help individuals navigate the banking landscape, reducing their reliance on exploitative practices.
The banking system, like colonialism, thrives on extracting wealth from the vulnerable for the benefit of the powerful. As we confront the realities of financial inequity, we must channel Fanon’s spirit of resistance, advocating for a system that genuinely serves the people. Only through collective action and a commitment to ethical finance can we hope to create a world where financial institutions empower rather than exploit.
Mayalo is an independent writer, analyst, and commentator
