First direct - the direct banking subsidiary of HSBC - says users of the iPhone will be able to surf its Web site and access all online banking services wherever they are as easily as they could from a personal computer.

"By working with the iPhone we will be giving our customers the opportunity of doing their banking when, where and how they want to," says Chris Pilling, chief executive of first direct.

Pilling says first direct, which celebrates its 18th birthday on 1 October, currently has over 875,000 Internet banking users in the UK.

Earlier this week the bank dropped the £30-per-year charge for its "red alert" text messaging service, which warns customers if they are close to, or over, their overdraft limit. A similar service was set up by Lloyds TSB earlier this month which sends a warning text message to customers if they are within £50 of going overdrawn. The Lloyds TSB service is free until the end of the year, but will then cost £2.50 a month.