After a dinner meeting with First Direct (FD) at the FSClub last Monday; an interview with Paul Say, CMO of First Direct; last week concluded with a blogoblast between me, Brett King and Visible Banking with Matt Colebrook, CEO of FD.Anyone would think they were paying me to advertise their business which, just to make clear, they are not.So why am I writing and indulging FD so much?Because I’ve known them 21 years since their inception and launch.Because they’ve succeed in creating a completely different bank business model in the UK, and it works.Because they’re the best bank in Britain for customer service, as recently proven.And yes, because they’re indulging me a little bit, by supporting the FSClub and providing lots of input on where they see banking going in the future.So here’s the low down.First Direct were launched in 1989, when most people could only get into a bank branch during the bank’s restricted hours of opening.I talked about this recently in an article and video with the Independent:“Twenty-one years ago banks were completely in control of the way that they interfaced with their consumers. Power was centralised around big institutions in business, the media and politics, and banks were no exception to this. They opened between 9:30 and 3:30 and closed at weekends. If you wanted to interact with your bank, you did it very much on their terms and in a branch.”This was when First Direct launched.Now I remember that time well, as I’d been involved in some call centre finance trials and everyone told me they wouldn’t work.
The banks believed the technology was too early – back then, people had old rotary telephones:
And people were just switching over to these new fangled, digital, pulse telephones:
And this is just 21 years ago!
The mobile was but a flash of inspiration on Motorola’s R&D screen:
So the banks said that (a) the telephone technology was not mature enough and (b) that customers did not like the service they received on the telephone.Well, no wonder. This is because tellers from branches were suddenly shoved into faceless communications with people they weren’t trained to deal with via telephone; using processes and scripts that were tightly controlled, and made the whole thing an awkward exchange between customer and bank.First Direct overcame this by using a human approach.They gave staff general guidelines and called them people and associates, rather than employees or staff.They put them in teams to trade off each other, and the teams had fun names like “The Contortionists: we bend over backwards for our customers” (I’d like to see that).There were not scripts and they were told to deal with customers as though they were friends.The result is that First Direct rapidly expanded as a human bank.The back office technology was written in old BASIC programming, with very basic 3270 green screen access. Bear in mind, the original call centre bank was created by Midland Bank, prior to HSBC’s assimilation, and you get an idea of why it would have been cheap.Funnily enough, 21 years later, Matt says they are using the same old back office technologies.So this bank is nothing about technology innovation. It’s all about process and people innovation; cultural innovation; human innovation.For 21 years the bank has grown and evolved to suit those people who want to use them, who are typically higher net worth, internet-savvy, educated professionals.Today, the bank sits firmly within the HSBC empire as a model of how to do remote, bank without branches servicing.This is illustrated by the fact that the core call centre technologies are about to go through a refresh to be the platform for all of one HSBC’s global call centre platforms.But it’s still a bank about people and human interaction.For example, Matt retold a story last week of one call centre operator who’s bag was lost on a train with her ticket, so the keen young service guy dived down to the train station with cash in hand to pay for her train ticket.That’s service.“At a cost”, I hear someone shout (and several did at the Club meeting last week).Sure, it’s at a cost. But First Direct is a bank without branches.They exist as a bank that has no overhead bricks and mortar infrastructure.Therefore, if their call centre operator takes five minutes more than their competitor’s to answer a call and resolve a problem ... it’s ok. Because their competitor has $25 per minute in extra costs to cover wasted branch space.What about the future?Well, as mentioned, the bank is going through a technology platform refresh and will continue to be focused upon gaining and retaining their core high net worth, higher educated client.Whilst HSBC will be focused upon how to combine the wonders of remote servicing without scripts through a human approach to a global operation that can live in harmony with branch services, as branches close.