The Future of Banking

Banking By Personal Computer The Next Revolution, As First Direct Turns On The Big Switch

A new direct banking revolution is about to hit the UK, according to First Direct, the UK's leading 24-hour bank - not only is telephone banking growing at record rates, but there will be an explosion in PC banking over the next decade.

According to the research, more than a third of all current account holders in the UK (36%, or nearly 12m people) expect to use the Internet or similar technology to arrange their finances within 10 years. Currently, fewer than 1% actually do so.

The survey also showed that 13% of current account holders (or 4.3m people) now have access to the Internet, up from 5% in 1996. One in five First Direct customers have access, up from 12% two years ago.

In addition, 47% - 15.5m people - are enthusiastic about the arrival of TV banking.

Peter Simpson, First Direct's commercial director,says:

"The point about 24-hour direct banking - not just by telephone, but by personal computer, over the television and so on - is the freedom it gives people to decide for themselves when and where they'd like to bank.

"It removes barriers of time and place, so you no longer have to go into a high street or bank at specific times that you have no control over. The fact that we are open around the clock is not the central appeal - it is that we never close, so you never have to worry about missing us. You are in control and you set your own agenda."

First Direct's own experience supports the notion that 24-hour direct banking is undergoing massive growth:

• Every month, as many as 40% of people in the UK who switch banks join First Direct.
• The bank is currently taking on new customers at a rate equivalent to opening three new bank branches full of customers every month.
• In 1997, First Direct had more than 10 million calls in a year for the first time.
• Earlier this year, the bank took 25,000 calls for the first time on a Sunday.

First Direct believes that a growing desire among women to do their banking remotely is one of the reasons behind the growth of direct banking. When it was launched in 1989, 60% of the bank's customers were men; now for the first time ever, half are women.

Other findings from the report are:

• The number of people with bank accounts who claim to do all their banking by phone has risen to 6% (nearly 2m people) from 1% in 1994.
• Within the next 10 years, almost 20% think they will be doing all their banking by telephone - 6.3m people, three times the current number.
• More than half (55%, or 18m people) think that they will do their day-to-day banking by telephone within 10 years and 28% (about 9m people) expect to arrange and access their mortgage via the telephone.

Technical details

MORI conducted 1,012 face-to-face interviews with current account holders in-home across Great Britain between 27 August and 12 September 1997.