Community banking has in fact begun to rise in popularity. Following the recession and subsequent onslaught of large fines by the FCA and other regulatory bodies, consumer trust is starting to turn back to the local bank; entrusting your risk to a smaller subset of individuals offers the benefit of peace of mind but also (hopefully) means those individuals are more financially responsible when it’s their neighbors money on the line as well as their own.
For example, Guevara, a small Insurance company won countless innovation awards in 2014 for re-producing a model that already existed in the early days of insurance. By segmenting individuals into small pools of risk(people they can choose to be with, or just like-minded drivers), they hedge their risk on the other people’s safe driving. This accrues over time, creating a reduction in their yearly payment, rather than relying on yearly rates recommended by large conglomerates who have a (usually) global book of risk to hedge you against.
It would be nice to see a lot of research done before moving forward with this idea: start with conception and build up to corporate strategy. Underlying this ultimately, there has to be a need and an appetite, if you don't trust your neighbor, you won't want to bank with them; likewise if you have no money to put into a bank.
Be interested to help if this gets off the ground.
Great idea! I'd also like to see this applied further afield to the likes of governmental institutions and larger corporations. Akin to a war-torn Europe with resources scarce on the ground, people didn't spend more money than they had because they couldn't, and their country couldn't afford it. Flash forward 70 years and a culture of "debt" has enveloped modern societies.
While somewhat an obscure reference, this idea embeds a different cultural norm whereby the individual is led to feel more responsible for the money he or she spends and can see where that money goes rather than knowing their account is somewhere in the plus or minus for the month. I agree with some of the other commenters, there would have to be a clear line of credit and debit (especially with online transacting as certain sights charge you for credit cards and others mandate it's credit card only). Likewise, the individual should have a clear understanding of what their costs of living would be relative to their expenditure. This would offer a dual benefit, by helping the individual create a secure credit score and monitor their spending habits.
Brilliant stuff, it would be interesting to see this primarily developed for a small control user community and then standardised for wider consumption.