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first direct celebrates its 25th Anniversary

01 Oct 2014

As first direct celebrates 25 years of putting customers first here’s 25 facts you may not know about the bank and financial facts you may not remember!

Tracy Garrad, CEO of first direct comments:  “The world of banking has changed beyond recognition in the 25 years since we launched on 1 October 1989 and started a service revolution. Our future will continue to be based around our customers - which is exactly how we started all those years ago.”

first direct facts

  1. Has been in profit every year since 1995
  2. Has 1.28 million customers - all of whom have current accounts
  3. Employs 2,800 people at two sites, in Leeds and Hamilton (near Glasgow)
  4. More than 80% of the 36,000 customers who joined first direct in its first year are still customers today
  5. 59% of the total customer base has banked with it for more than 10 years
  6. Has been above all GB banks and building societies with a high street presence for both customer service and recommendation since records began in 1998 and 2009 respectively*
  7. years ago became the only bank to offer a service guarantee - and still is
  8. Handles around 143,000 calls a week and around 10,000 of those, a day, are outside traditional banking hours
  9. Was the first bank to introduce a transactional banking app
  10. Over 89% of customer contact with first direct is electronic
  11. 85% of first direct 's customers are now active users of online banking
  12. Was the first bank to introduce a twitter account in 2009
  13. Twitter mentions have increased from 847 to 1436 in the last 12 months
  14. On average, the speed of answer for any tweets sent to us 24/7 is less than 10 minutes
  15. Award winning customer service standards: in the last four years alone the bank has won 25 service related accolades
  16. Was originally owned by Midland Bank, who first came up with the potential concept of a 'windowless branch' in the summer of 1987
  17. first direct started life as a blank sheet of paper with the word customer in the middle
  18. A full feasibility study was launched in April 1988 – with the bank launching 18 months  later at 00.00 on 1 October 1989 and it has never closed since
  19. The bank’s pre-launch planning budget was fixed at £427,000, with £15k ear-marked for two IBM AT computers and an unspecified portable computer
  20. A further £2k was budgeted solely for 'computer ribbons and floppy disks'
  21. At launch, the bank announced to its staff that “what customers are buying is the experience of dealing with us.”
  22. The original marketing slogans included "first direct - the first name in direct banking" and "It's time for something better. It's time for first direct ."
  23. ‘Raincloud culture’ was summarised as “the consumer is king and telephone staff are the heroes”. The somewhat ambitious vision was that the bank’s watchwords would be “speed, convenience and quality of service” and that “customers will actually enjoy the experience of banking with us.”
  24. Research indicated that services in the longer term could include “a link with Home Banking using a PC in the customer’s home office”.  A timely observation in light of the fact that 1989 was the year that Sir Tim Berners-Lee was busy inventing the World Wide Web
  25. The research was not always consistent. Whilst the initial main advantages of the new bank were seen as 1) opening hours 2) better interest on current accounts and savings,   current accounts and savings, lower interest on loans 3) ease of contact, later research noted that “financial incentives of interest on current accounts and cheaper banking than with a traditional High Street bank will be more influential in attracting customers than the convenience factors of opening outside banking hours and telephone contact.”

Financial facts

1989

October 5 – Base rate hits 15%

1990

In 1990 the average Standard Variable Rate (SVR) for mortgages was 14.30%

1990 was the peak year for the number of cheques written (3.97 billion for the year which equates to 11 million per day) – by 2013 this had fallen to 2 million per day

1991

April 1991 CPI measure of inflation hits 8.5%

1992

25 June – Midland Bank became a member of the HSBC Group in one of the biggest amalgamations of its time

1993

March 1993 – the threshold for stamp duty on residential property transactions increased from £30,00 to £60,000

1994

November 1994 Best Buy 3 year fixed rate bond paid 8.30% (compared with sub 3% today)

1995

October 1995 – A 5 year fixed rate mortgage was 7.95% for an 80% LTV (double the rate for an equivalent mortgage today)

1996

December – Best Buy rate for a personal loan of £5,000 was 12.8% APR (compared with 5.3% APR today)

1997

Tony Blair’s Labour came to power in May 1997 and announced its intention to transfer full operational responsibility for monetary policy to The Bank of England

1998

Best Buy instant access savings rate 7.40% (compares with Best Buy rates of 1.50% today)

1999

ISAs introduced with max overall limit of £7,000 (max £3,000 in cash)

2000

MIRAS (Mortgage Interest Relief at Source) was withdrawn from 6 April 2000

2001

There were 2.66 billion debit card transactions in 2001 (compared with 8.35 billion in 2013)

Base rate was cut seven times between February and November in 2001 (down from 6% to 4%)

2002

There were 38,746 ATMs in the UK in 2002 (compared with 67,963 in 2013)

2003

17 February – London Congestion charge is introduced

2004

The longest 0% credit card balance transfer term was 12 months (compared with 34 months today)

2005

January 2005 – UK unemployment was 1.45 million (compared with 2.68 million in Oct 2011 and 2.08 million in June 2014)

2006

Chip and PIN became mandatory from 14 February 2006

The OFT impose a maximum charge of £12 for credit card late/missed payments

2007

Contactless credit cards first launched in the UK

13 September – news breaks that Northern Rock sought emergency funding from the Bank of England – prompts the first run on a bank for more than a century

2008

27 May – Faster Payments Service was launched

2009

In February the average house price had fallen 17.6% in a year to £147,746

5 March – base rate cut to 0.50%, its lowest ever

2010

The year of the sovereign debt crisis saw Greece rescued with a €110 billion package in May

Inflation was more than 1% above the Bank of England’s 2% target for the whole of 2010

2011

1 November – the Junior ISA was launched

2012

Average of 87 purchases per year made per debit card (up from 53 in 2002)

2013

1 July – Mark Carney succeeds Sir Mervyn King as Governor of the Bank of England

2014

ISA limit increased from £11,520 to £15,000 on 1 July and renamed NISA with flexibility to use the full limit for cash, investments or a mix of both

Base rate has changed 72 times in the last 25 years

 

Ends

 

For further information please contact Amanda.brown@firstdirect.com on 01132766700 or Rebecca.sykes@firstdirect.com on 01132766899.

*Note 1:

first direct has had a higher proportion of satisfied customers than other GB banks and building societies with a high street presence* since measurements began in 1998

Source: GfK NOP FRS, 12 months ending December data 1998 through to 2013 and year-to-date 2014. Main current account holders who are 'extremely satisfied' or 'very satisfied' with their current account overall.

*All major banks and building societies with a high street presence/branch network (where n>50)

Note 2:

first direct customers have been more likely to recommend their bank than customers at any other GB bank or building society with a high street presence* since measurements began in 2009

Source: GfK NOP FRS, 12 months ending December data 2009 through to 2013 and year-to-date 2014. Main current account holders NPS scores (NPS calculated % giving scores 9to10 - % giving scores 0to6 for likelihood to recommend main current account provider).

*All major banks and building societies with a High St presence/branch network (where n>50)

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