Banking Tech Through the Ages

The earliest ‘cheque’ in the bank’s museum takes the form of an affectionate letter, dated 1676, from a Mr Will Hale to his ‘loving friend’ Richard Hoare. The note asks the goldsmith to pay the bearer the sum of fifty-four pounds, ten shillings and tenpence. When, 250 years after it was written, the cheque was returned to the bank, someone straightaway fetched the oldest ledger to see if the money was drawn and charged to Mr Hale’s account. It was: the transaction had gone through and been recorded on the page.² There was no need to investigate what became of Mr Hale himself: his descendants are known and valued customers of the bank.

Richard Hoare did not invent the cheque, but he was certainly one of English banking’s earliest adopters. And by the 1760s Hoare’s was issuing printed cheques, to be filled in by the payer. The bank can also claim to have invented the perforated cheque (and so the inestimable convenience of the cheque stub). The first of these were issued by Hoare’s on July 5, 1864 and the entire banking industry soon followed suit.

All banks have to adapt to technological change, but a bank such as Hoare’s must also remain true to its values – which include the kind of human connection evidenced in Mr Hale’s cheque. Keeping the personal touch became infinitely more challenging with the dawn of the digital age. In 1962, when Hoare’s acquired its first electronic accounting machine, there was much discussion of what to do about customer statements, which were still handwritten. Some wanted to retain this custom – not out of whimsy, but because the practice helped individual clerks understand customers’ finances, and so represented exactly the kind of bespoke banking that was Hoare’s specialty. In the end it was decided that printed statements were the inevitable future – but that customers could have their statements copied out by hand if they so required.²

In 1975, the bank invested in its first mini-computer, a programmable PDP 11/45. The machine had a capacity of 256 kB, and was soon overwhelmed by the torrent of data it was required to handle. Clearly, the coming digital revolution was going to be hard to negotiate, but it delivered the bank one stroke of luck early on. The spread of ATMs and cash cards in the 1980s allowed Hoare’s customers to draw money from any ‘hole in the wall’ displaying the Visa sign.

Fintech has come a long way since the 1980s. Hoare’s view of automation, computerisation and digitalisation is that these are all good things when they make the banking experience better for the customer. They do not displace or replace the warm human experience – they complement and enhance it. It makes sense that, when customers want to check their balance, they log in biometrically to the bank’s app. It takes a moment, and is more convenient than a phone call. But when customers need to discuss something complex or personal – inheritance, investments, legacies – then clearly a meeting over coffee or lunch with a relationship manager is the better way. Technology is not a substitute for a living breathing banker; it is there to make the flesh-and-blood banker more present and helpful.

In the digital world, data is a valuable asset, like coin and silver plate in the days of the bank’s founder Richard Hoare. And like him, the 21st-century bank continues to leverage that wealth for the benefit of its customers.

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¹ ^{Story told in Alderman FA Hoare, The Romance of Private Banking, Guildhall Historical Association, December 1951}
² ^{Story told in Pamela Hunter, Through The Years, Volume 2, 2018}