ARCHIVED ARTICLE This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Image of Michelle Monck

Michelle Monck

Consumer Finance Expert
Published: 01/10/2019
first direct logo in a book

News contents

It’s 1989, the Berlin Wall has come down and the Bank of England base rate is 14.88%. A new bank called first direct is launched by Midland Bank. It is the first telephone bank in the UK and allows consumers to bank at a time and a place convenient to them using their phone. It's launching principle is to ‘pioneer amazing service’.

Fast-forward 30 years and first direct has held onto that aim and is recognised for having one of the highest customer satisfaction scores in the UK banking market.

Joe Gordon, head of first direct, said: “first direct is the original challenger bank, and we’ve been pushing boundaries for the last three decades. We’re still pioneering, but we’ve stayed true to our principles; we know our past, present, and future success is built around providing customers with amazing service.”

So, what has changed in banking over the past 30 years?

During the past 30 years, the way we bank and manage bank accounts has been transformed, with the Bank of England base rate now at near to historic lows, an increase in challenger banks emerging since the financial crash in 2008 and the rise in technology that has revolutionised how we manage and spend our money.

Banking moved from branch to phone and then to online banking

In May 1997, Nationwide Building Society was the first UK financial services provider to launch an internet banking service. Royal Bank of Scotland followed in June. In the same year, first direct also joined this group with its PC Banking Service.

Paying for goods and services moves from cash and cheque to cards

In 1998, debit card spending in the UK overtook the use of personal cheques. By 2001, the levels of spend on debit cards exceeds credit cards. In 2004, card expenditure overtakes cash spending for the first time. In March 2019, over 40% of card payments are made using contactless technology.

Challenger banks are rising but still haven’t removed the monopoly of the big four

According to a report from Accenture, digital-only banks will reach 35 million customers by September 2020. These digital challengers have seen their average balance held by their customers increase from £70 to £350. Accenture also states that most people use their digital challenger bank accounts as a secondary account and that the rate of growth is slow. The traditional banks still retain the dominant share of the market.

Today, first direct offers bank accounts, mortgages, savings, loans and other retail financial products.


Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time. Links to third parties on this page are paid for by the third party. You can find out more about the individual products by visiting their site. will receive a small payment if you use their services after you click through to their site. All information is subject to change without notice. Please check all terms before making any decisions. This information is intended solely to provide guidance and is not financial advice. Moneyfacts will not be liable for any loss arising from your use or reliance on this information. If you are in any doubt, Moneyfacts recommends you obtain independent financial advice.

first direct logo in a book

News contents will never contact you by phone to sell you any financial product. Any calls like this are not from Moneyfacts. Emails sent by will always be from Be ScamSmart. will never contact you by phone to sell you any financial product. Any calls like this are not from Moneyfacts. Emails sent by will always be from Be ScamSmart.