As a rule it is always better to look forward than back, but for one issue we have been looking back as RBI celebrates its 750th issue.
Looking back to issue number 1 in May 1981 and subsequent early issues of RBI has been huge fun.
Issue number 1 was published in May 1981. In the interim, there have, of course, been huge changes in channels – for example, our branches table in 1981 showed 22,000 bank and building society branches in the UK. Today it is about 7,800 (see page 7). NatWest, to pick just one example, is down from 3,370 then to 655 today.
We also reported on banks trialling ATMs; in 1981 Barclays had a mere 240 ATMs across 3,014 branches.
But the biggest change, arguably, is not in channels but relates to the unbanked – and it is actually a great banking success story. In 1981 we reported on the great unbanked British. The UK banks’ own research organisation at the time said that a staggering 45% of Brits did not hold a current account. Today, some 46 million Brits hold a current account – about 90% of all adults.
We reported on the need for cash displacement in 1981, and that subject remains topical today. Today’s millennials will be amazed to learn that, in 1981, a majority of UK workers were still paid weekly and in cash – 14 million workers.
Much, however, has not changed since 1981. Issue 1 talked of the future of current accounts – should interest be paid on current account balances?
There was discussion about fears over margin pressure and forecasts of a coming era of lower interest rates: for the record, the net interest margin enjoyed by Barclays in the period 1978-1980 was in the region of 6-8%, against about 2-3% today. And there was talk of the dominance of the Big 4 and the need for greater competition.
The need for challengers
We are still talking about the need for challengers and greater competition.
The big story in issue 1, May 1981, was the outbreak of a bidding war for RBS, with rival bidders HSBC and Standard Chartered.
That was to become quite a saga, and if the Thatcher government – yes, the free market government of Margaret Thatcher – had not ultimately blocked both bids, banking history would have been very different.
We might never have heard the name Fred Goodwin. It also seems to suggest that a Standard Chartered/RBS combined bank would not have bid for a toxic bank in the Netherlands.
Two other things have not changed since 1981: Vernon Hill (see page 34) was stirring up the market and bucking the market with his focus on the branch – sorry, store – and his focus on building fans through service and convenience.
And closer to home, the biggest thing that has not changed is that the UK is a great market for retail banking. In issue number 1, we headlined a feature: The UK – a great market for retail banking.
That was true then, and arguably is even more accurate today. Witness the explosion in the number of start-up and challenger banks.
I have only been involved with RBI since about issue 520, so almost one-third of the title’s history. It has been huge fun, and seems an appropriate time to say a heartfelt thanks to all subscribers, contributors, bankers, PRs and press officers for their help.
And just to put May 1981 into some kind of non-banking historical perspective, in other news that month, Bob Marley died, the musical Cats was performed for the first time, and number 1 in the charts was Bucks Fizz’s Making Your Mind Up.