The banking legacy of the First World War

Many features of banking today can be traced back to the war and its immediate aftermath.

Lasting effects

For Britain's banks the First World War had a profound and lasting effect. It was, in many ways, the crucible in which today's banking sector was formed.

The 'Big Five'

The war massively accelerated the process, already underway by 1914, of banking mergers. This led to the emergence by 1918 of the 'Big Five' high street banks that were to dominate British banking for most of the 20th century. Local or regional banks all but disappeared, replaced by big banks with nationwide – and fast-growing – branch networks.

Cross-border ownership of banks

The trading names of banks in England, Ireland and Scotland generally remained distinct, but their ownership did not. For the first time, some Irish and Scottish banks became subsidiaries of English owners, and vice versa. These expanding horizons were not confined to the British Isles. Many banks also opened or acquired offices overseas, particularly in Europe and Africa. These were the first tentative steps towards the globalisation of banking.

Widespread use of banknotes in England and Wales

Banknotes had been part of everyday life in Scotland for centuries, but in England and Wales they were an uncommon sight before 1914. Limited to denominations of £5 or higher, few people ever used one. This changed in 1914 with the Treasury's issuance of vast numbers of notes for £1 and 10s. Introduced as a way of keeping the economy moving amid war conditions, they were most people's first introduction to paper money. The Treasury continued to issue them until 1928, when the Bank of England took over the responsibility.

Expansion into new sectors

The immediate post-war years saw the movement of banks into new kinds of business, including foreign trade, exchange and trusteeship. They set up separate departments to deal with such work. It became possible for workers to specialise in particular areas, taking their careers in directions that had not formerly existed within banking.


The banks had traditionally taken a very staid approach to advertising. In Victorian and Edwardian Britain, grocery products were advertised colourfully and engagingly, but bank accounts were not. During the war, however, the banks saw how the government advertised its war bonds, certificates and loans to the general public. They also got used to the idea that selling these products was part of their job. In the 1920s and beyond, they used these experiences to begin dabbling in advertising and marketing.

A wider range of customers

The National Savings movement began in the war as a way of encouraging the general public, including people on modest incomes, to put money into war savings products. It continued to thrive long after the war. Seeing its success, the banks learnt that there was a market for products aimed at smaller savers. After the war they began to work much harder to attract this new group of potential customers.

Women working in banking

Women went to work for banks in large numbers for the first time during the war, working initially in back offices. Before long they were serving customers at the counter too. Many looked upon their jobs simply as a contribution to the war effort, and left after the return of peace. Some stayed, however. It was to be at least half a century before they would be treated on equal terms with their male counterparts, but never again would banking be an all-male career.


The need to manage with fewer staff encouraged banks to be bolder about embracing new technology. Equipment such as typewriters, addressographs and accounting machines became much more common. Telephones, which were already installed in larger branches, were introduced more widely.

Unionisation of bank workers

In common with workers in many other sectors, bank employees became increasingly dissatisfied with their pay and working conditions as the war continued, prices rose, and the demands upon them became ever-more onerous. The shortage of labour gave them more bargaining power than ever before, and Britain's first effective trade unions for bank workers were established in 1917 and 1918.

Inter-bank organisations

The demands placed upon the banks throughout the war, but particularly in the financial crisis at its outbreak, showed that they were ill-prepared for circumstances where they needed to work together as a unified industry. They were forced to rely on informal networks between them and individual leaders who were prepared to step forward. Recognising this failing, in 1919 the British Bankers' Association was formed as a body that would regulate, coordinate and speak on behalf of its members.