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How First Direct shook-up banking with its ‘radical’ launch

How First Direct shook-up banking with its 'radical' launch


How First Direct shook-up banking with its ‘radical’ launch


The launch of First Direct was all very hush-hush. As Britain’s first ‘virtual’ bank, with no branches and no bank managers, it was an entirely new proposition, and as such very little was shared about the concept ahead of launch. Even the team hired to work on the initiative were kept in the dark, including marketing director Jan Smith who was working at TSB at the time.

“Someone told me Midland Bank was looking for a marketing director for an initiative called ‘Project Raincloud’,” she recalls, a name chosen to indicate its potential for growth. “They couldn’t tell me what it was about because I was working at a competitor, so I had to take a punt… I had no idea what I was going to until I arrived.”

The concept for First Direct came when one of the senior team at Midland went to the United States and witnessed telephone banking in operation. Midland wanted to do something similar and the idea for the UK’s first remote bank, open 24 hours a day, seven days a week, 365 days a year was born.

Smith joined an “embryonic team” of six people who had been plucked from other parts of Midland on 1 January 1989 and was effectively given a blank sheet of paper.

“I came in and thought we’ve got to recruit agencies, look at branding, look at naming. We’ve got to look at all the products and forms. How are consumers going to operate an account? What levels of security are we going to have? How are we going to do security on the telephone? What sort of people are we going to recruit and how are we going to train them? All of these things were virtually unknown.”

As First Direct was a radical step change in banking – the antithesis of a conventional bank – we were adamant the communications had to reflect that.

Axel Chaldecott

As part of this process Smith was responsible for naming First Direct. The team originally wanted to call it The Direct Bank but the Bank of England wouldn’t approve the name as it didn’t have its own banking licence – it was a separate entity to Midland, but would operate under its banking licence.

“We went back and I said, ‘This is the first direct bank we’re creating so why don’t we just call it First Direct?’ And that’s how it happened. It was just a simple conversation.”

When it came to positioning the brand, the main focus was the fact it was always open. “We actually had customers ringing up on the first Christmas day saying, ‘Hello, I don’t want anything, I just wanted to see if you were open’ – people were actually checking,” laughs Smith.

First Direct wasn’t pitched as a mass-market brand, its target audience was young professionals with an adventurous attitude, “savvy people who were at the cutting edge and would go ‘wow, this is something new, I think I’ll give it a go’.”. As such Smith says there was no risk of cannibalising Midland’s older, more conventional customers.

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The importance of brand

Given First Direct had no high street presence having a solid brand and communications strategy was absolutely critical. “It was the most important thing,” says Smith.

Paul Jarvis at brand consultancy Wolff Olins came up with the black and white concept, which was incredibly different to anything else on the market at the time. “It was very simple but very striking,” says Smith.

Wolff Olins worked closely with Axel Chaldecott at creative agency HHCL (who is now global creative director at JWT) on the wider communications strategy.

“As First Direct was a radical step change in banking – the antithesis of a conventional bank – we were adamant the communications had to reflect that,” says Chaldecott.

He recalls a conversation with Jarvis: “He said rather than end up in the middle ground like a lot of competitors, First Direct should either communicate in a 0% way, which is black and white, functional, no-nonsense, very straight, or in a 100% way, so the opposite end of the spectrum, very colourful, witty, irreverent,” he explains. “We decided on a way to do both.”

First Direct launched on 1 October 1989 to much fanfare – on a Sunday, when all its competitors were shut. While the functional aspect of the bank played out in print with an ad explaining what consumers could now do on a Sunday thanks to First Direct – agree an overdraft, get a mortgage, etc, – out-of-home and TV advertising took on the “100% way”.

Outdoor ads featured very little factual information, instead using pictures of mundane, everyday objects like a red washing basket or a row of empty milk bottles, alongside lines such as ‘banking without branches – it’s extraordinary’ and ’24hr person-to-person banking – it’s extraordinary’.

“Rather than use extraordinary images like a picture of the universe to say this bank is extraordinary, we used common household objects and did it that way. A lot of the industry were quite bemused by what we were trying to do,” says Chaldecott.

The brand’s TV debut was equally provocative. It launched with a one-off ad purporting to be from the year 2010, which interrupted an ad for Audi – a move that was pre-agreed with the auto maker.

“The screen went a bit wobbly, almost like your TV had been hacked – not a word used often back then – and then this woman appeared and talked about celebrating the 21st anniversary of First Direct,” recalls Chaldecott.

This was followed a week later by another TV advertising first. First Direct synced two different commercials on ITV and Channel 4 – one positive, one negative – which were introduced by actress Charlotte Rampling who told viewers to choose which version they wanted to watch.

The campaign was a huge success, with more than 1,000 enquiries made within the first 24 hours. But First Direct ran into a problem. Because there were only two points during the evening when ad breaks across ITV and Channel 4 coincided, its call centres couldn’t handle the volume.

“Within two weeks we decided we had to radically change [the ads]. At great expense we put them to one side and created 84 10-second commercials that could run throughout the afternoon and the evening that would make it much easier for the telephone staff to on-board customers,” says Chaldecott.

Within eight weeks of launching First Direct had the highest awareness of any UK bank, despite having on a quarter of the budget of the big players at the time.

First Direct’s vital statistics

  • First Direct launched on 1 October 1989
  • More than 1,000 calls enquiring about the bank were taken within the first 24 hours
  • Within the first eight weeks, First Direct had the highest awareness of any UK bank
  • First Direct acquired 200,000 customers in the first two years
  • First Direct’s owner Midland was bought by HSBC in June 1992
  • The bank gained its 500,000th customer in 1995
  • It first made a profit in 1995 and has done every year since
  • First Direct launched a PC banking service in 1997, text message banking in 1999 and internet banking in 2000
  • Today, First Direct has 1.45 million customers


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