Direct banks eliminate the costs of maintaining a branch network while offering convenience to customers who prefer digital technology.
A subsidiary of the then Midland Bank, it pioneered the concepts of no branches and 24-hour service through a call center.
The commercialization of the Internet in the early 1990s was the biggest driver in the creation of fully direct banking models.
However, there was initial consumer hesitation in conducting monetary transactions over the Internet, especially with an entity that they could not deal with face-to-face.
[1] While SFNB did not make much profit in its initial years, it demonstrated that the concept of direct banking could work.