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Page last updated at 11:40 GMT, Tuesday, 21 October 2008 12:40 UK

Back to ye olden days banking?


Bank manager Neville Tarratt in footage from 1975

By Finlo Rohrer
BBC News Magazine

The financial crisis has led to calls for a return to old-fashioned banking. But it's easy to forget that once upon a time current accounts cost money, you needed to be nominated to even get an account, there were no cash machines and banks could be intimidating places.

We all know what a bank manager looks like. Staring down his nose over half-moon spectacles, this custodian of high street finance is not happy with the state of your account.

And yet this stereotypical manager ceased to be the key figure in banking some time ago and, despite being vaunted in the press as a bulwark against foolish lending practices, is little more than a folk memory for many.

You knew whether someone was spending a lot of time at local bookies or whether they were off with somebody else's wife
Neville Tarratt
Former bank manager

Particularly for people under the age of 30, the nearest they get to the old-style manager is watching Dad's Army, whose Captain Mainwaring acts as a miserly check on the finances of Walmington-on-Sea.

Starting in the late 1960s and through the 1970s and intensifying during the deregulation of the 1980s, banks changed. The world of banking before this was unrecognisable.

In 1975, Neville Tarratt featured in a BBC Money Programme that followed a day in his life as a manager at a Barclays branch in Stratford-upon-Avon.

The programme shows Mr Tarratt interviewing a young couple about their prospects for a loan, visiting local businesses and even spending some time on the golf course.

'Know your customer'

Having retired in 1982 after 41 years service and remained as a Barclays customer, Mr Tarratt, now 83, has seen things change.

"The difference now is the decline of the old-fashioned bank manager, the manager who was known to everyone in town. The other thing is that you can't ring the branch anymore. My big maxim was 'know your customer'. I don't think they do now."

Knowing the lives of customers inside out made decisions on loans much easier.

Ronald Ibbotson and staff at his branch in Amesbury

"You were the focal point of local business affairs, you were part of the local community. You knew whether someone was spending a lot of time at local bookies or whether they were off with somebody else's wife."

Brian Capon, who spent the 1970s as an assistant manager at Midland branches in Northamptonshire, remembers this very different banking world, one where many people did not have accounts.

"It was very strict. You couldn't get an account unless you were introduced by two existing customers."

With advertising and cut-throat competition still far off, families tended to stick to the same bank.

"Let's say you had an account and a particular family member went to university. They came in to open an account - father would bring the offspring in and introduce them to the manager who would give them a pep talk and warn them not to get overdrawn."

Shop front

The High Street banks still boast of the numbers of "local business managers" they have, but there's no doubt control has been centralised.

Banks want you to call an 0845 number. They don't want you to call your local branch. In many ways branches act as a shop front for a range of products, rather than the centre of services.

Fees for account
Harder to get account
No cash machines
Banks did not usually give mortgages
Accounts managed locally

It's not a situation that pleases Ronald Ibbotson, who joined the (now defunct) Martins Bank group in 1949 and managed the Barclays branch in Amesbury, Wiltshire, between 1972 and 1986.

The key for him was a presence in a local community that enabled informed financial decisions to be made about people who wanted credit.

"Now it's run more or less by computers and IT programmes. If you fit in one of these boxes you're fine.

"I made a lot of loans to people who wouldn't have been granted them had they gone into a bank today. I knew them, I knew what they were capable of repaying. I used to go and visit their businesses and see what they did, what they made and how they seemed. Today risk management is done by computers."

Family snapshot

And those computers can sometimes struggle to match the assessment that somebody with a close connection to both families and businesses can make.

"The bank manager would know the family financial background," says Mr Capon, who now works for the British Bankers' Association.

Inside Barclays Bank, 1975

"He had a complete snapshot of your finances. If you had shares the dividends would be paid through the bank. Nowadays people can have accounts in all sorts of different institutions."

But of course, while it's easy to be nostalgic about an era when banks had some idea of what the people they were lending to were like, there were plenty of downsides to old-school banking.

"There was no such thing as free banking," says Mr Capon. "If you had a bank account you paid for it. And in those days you had to pay stamp duty on cheques and withdrawals - two old pennies straight to the government."

And the convenience we have today was a distant dream in the banks of yore. Cash machines made their debut in the UK in the 1960s but ubiquity did not come for many years.

Erratic machines

In the 1980s the advert for Halifax's Cardcash account showed the power of the idea of convenience. A young chap rises on a Sunday morning - with The Commodores' Easy Like Sunday Morning playing - finds there is no milk in the fridge, his cat is hungry and he has no money in his wallet. No fear - he's off in a moment, out of his warehouse conversion to the cash machine. The message is clear - convenience is here and it's a minor miracle.

Mr Ibbotson, 75, remembers the first cash machine installed in Southampton being an erratic beast.

"Sometimes it worked, sometimes it didn't. If it didn't it used to have a little notice saying the nearest machine is in Winchester [14 miles] or Portsmouth [18 miles]. It was a source of embarrassment."

A cashier gives money to two customers in 1925
Banking was a lot more personal back in the day

And, as Mr Capon recalls, if you weren't an early cash card adopter getting money out could sometimes be a difficult thing. You might struggle to cash cheques at branches other than your own, and might have to make special arrangements every time you left town.

"A lot of people think those were the days, but how many people want to go back to those days where you were limited to Monday to Friday 9am-3.30pm?"

The 1980s also saw banks move into mortgages, competing with building societies. Mr Ibbotson remembers being regularly taken to lunch by the local building society manager to give an assessment of potential housebuyers. That symbiotic relationship soon ended.

"It was a very big change and it immediately alienated your local building societies."

There will be many who do not miss the paternalistic aura of the old-fashioned bank manager. Many want banks to compete for our business. And there are many who prefer the big windows, spangly carpets and colourful displays of the new banks to the dusty austerity of the old banks.

"You go to the front door of the bank nowadays and it is a much better banking atmosphere," says Mr Capon. "It is very easy to look back into the past with rose-tinted spectacles."

Below is a selection of your comments.

Years ago I lived in Africa but still banked at my old Natwest Branch. When I came home on leave I went out to lunch sometimes with the bank manager and yes he paid. He also very kindly bought special birthday and Christmas presents at my request from my account and made sure that they were delivered properly. What a great man and now he has long gone as has the branch. I just had a flyer from Natwest which says You talk, we listen, we act! They will never be able to repeat, even remotely what this fine manager did for customers. How times have changed.
Alan, Warsaw, Poland

I was sent a stern letter and interviewed through a barred window for being 5 overdrawn in the 60s at Lloyds. Naturally I changed to another bank, RBS, who had a much more enlightened approach and have been with them for nearly 40 years.
Pete, Lancashire

I remember the first cash machines didn't return your card after dispensing the cash. It was posted back to you a couple of days later. That certainly limited the withdrawals you could make in a week.
Matt, London, UK

Although I agree that the banking days of old needed to change, it has been taken to far with banks now thinking of themselves as being "retail outlets" selling "products" and producing flashy ads with singing staff. A return to being "financial institutions" that offer sound, stable advice and inspire confidence, whilst maintaining the modern "accessible to all" attitude would be so much better.
GH, Tunbridge Wells

The last thing we want is a return to the old ways of banking. Despite the excesses, the opening up of credit markets, in recent years, to lower income people is a very good thing. Personal attention from the bank manager? - no thank you.
Michael Speight, London

I still remember going in to see the bank manager in his office when I opened my first bank account. It was great fun he even gave me a pep talk about saving early and not spending all my pocket money. they caught me young and the saving bug is still there.
Mark, Hexham

The respectable bank manager has disappeared, to be replaced by today's Pin Stripe Spiv - almost on a social par with bookmakers, pawnbrokers and second hand car salesmen. Why? Because removal of banking controls brought greedy and unprincipled barrow boys into the so-called "Financial Services Industry" to buy and sell money at a profit. The previous chancellor's decision to allow the removal of liquidity ratio control gave the spivs free rein to move from the old Bank of England controlled conservative ratios of around 8:1 to create mountains of Magic Money based on liquidity ratios of up to 30:1. Nothing more than a giant pyramid scheme. No wonder the economy is in a mess and bankers are in disgrace.
Frank Bowron, Hatfield

I remember my grandmother being horrified when the banks started "advertising". She felt standards were really starting to slip. An elderly friend also remembers being called into her bank to be told by the bank manager that he'd looked at her account and he felt he should advise her that she shouldn't be making such an expensive purchase (a dress or something) as she couldn't really afford it on her new teacher's salary.
Celia, UK

I remember (in 1993) asking my building society to lend my wife and I 2,000, so that we could convert our flat from one bedrooms to two. We had just had a baby daughter, and I thought the increase in the property's value in the five years we had been there would mean we would be offered the loan. I saw this a business transaction.

I will never forget the meeting. As my wife and daughter wept, the manager told us quite coldly that if we had failed to make adequate provision for the birth of our daughter, that is was no concern of the building society. He suggested we ask family members for the money. It became obvious that he did not see this as a business transaction, but as a chance to give a lesson in good household economy. Needless to say, we switched mortgages and got the loan, and the conversion did end up more than paying for itself when we did sell. Perhaps things did swing too far the other way - but I don't want them to swing all the way back.
Chris, UK

I'll bet Captain Mainwaring wouldn't have invested in the American sub-prime mortgages market. I don't think even Private Pike would have done that.
Nigel Macarthur, London, England

In 1986 I bought a house in London for 380,000 and spent 100,000 on improvements. As I had not sold my previous house, I approached Lloyds with whom I had banked for some years. My business also banked at the same branch and the manager knew my affairs pretty well. By a handshake, Lloyds offered to finance the whole deal by means of overdraft. At one point I had over 500,000 outstanding which was totally unsecured. Eventually, of course, I sold the old house and repaid the loan. But I often reflect on that deal to illustrate how much banking has changed in the last 20 years.
David L, London

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