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Paul Penrose

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Paul Penrose - Finextra

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Who launched the UK's first Internet bank?

23 May 2007  |  9738 views  |  1

Some confusion in the Finextra editorial office this past few days after we received conflicting press releases from Nationwide and the Royal Bank of Scotland both claiming to have launched the UK's first Internet bank ten years ago.

So it was gratifying to get an unsolicited update on the issue from the Nationwide press office this afternoon, pointing out that it was the "first UK provider" to launch an Internet banking service on 27 May 1997. Royal Bank of Scotland launched its online banking service in June 1997.

Note the subtle change in emphasis from the Nationwide camp. When Nationwide first ventured into the online space it was in fact a building society, meaning that Royal Bank of Scotland can legitimately claim bragging rights as the first UK bank on the Web.

Out of curiosity - and without wishing to spark any further conflict - does anybody know which of the world's traditional bricks'n'mortar banks was the first to establish a sizeable commercial presence on the Internet?

It all depends on how you define a 'sizeable commercial presence' of course, but my money's on First Union Corp (since merged with Wachovia), which in January 1995 stunned the industry with the launch of First Access Network, a 150-page customer service branch, offering information on products and services, job ads, budgeting tips and the company's involvement with the community - although crucially no transactional capability. Just to rub it in, First Union defined the business as 'cyberbanking' and registered the term as its own trademark.

Any other takers?

TagsRetail banking

Comments: (1)

Elton Cane
Elton Cane - writer & tech geek - Brisbane | 25 May, 2007, 13:20

I don't know about traditional bricks and mortar banks operating online under their own brand, but the first Internet-only bank was Security First Network Bank (SFNB), which was created when a US security software firm acquired a small Kentucky bank, Cardinal Bancshares, in 1995.

Wachovia and Huntington also invested money in the start-up – so this probably does qualify as the first instance of bricks and mortar banks getting involved in online transactional banking.

SFNB got Federal Reserve approval for its online-only service, and had a hugely successful IPO in May 1996.

But it couldn't build its deposit base, and after posting large losses and seeing its share price tank, the company's banking assets were bought by Royal Bank of Canada in 1997. The software subsidiary Security First Technologies (S1) remained independent, however, and went on to build quite a successful business - particularly during the boom years leading up to the turn of the millennium.

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job title Head of Research
location London
member since 2007
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I'm responsible for editorial content and quality control across the full range of Finextra media.

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