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The survey by Datamonitor found that 26 percent of European consumers who have Internet access do their banking on-line. The UK had the highest number of users in Europe with 7.52 million of its citizens choosing to conduct some or all of their banking affairs over the Internet. Datamonitor also predicted that by 2005 over 57 million consumers in the six countries it studied -- Germany, Spain, France, UK, Italy and Sweden -- would be banking on-line.
However, despite the increased availability of e-banking facilities in recent years, the report stated that the Internet came behind personal visits and the phone as consumers' preferred methods of dealing with banking products. In Germany, for instance, 86 percent of respondents preferred a personal visit, six percent liked to use the phone and five percent preferred the Internet.
The results demonstrated that a bank's branch network still remains vitally important to its operations and talk of e-banking leading to the demise of personal visits by customers had been ill-founded, according to Alex Boorman, an e-financial services analyst with Datamonitor.
"The strategies of many Internet banks were based on the idea that the death of the branch was imminent. However, Datamonitor's research confirms a growing realisation within the e-banking sector that this is not the case," he commented. "Although branch numbers are still falling, it is now recognised that the branch assumes an important role as part of a bank's multi-channel distribution strategy. To provide only one channel, whether it is the Internet or the branch, is to appeal to only a limited proportion of the consumer market."
Speaking to ElectricNews.Net, Boorman added that the Internet services of the banks would be better off playing a supporting role to the branches. "E-banking isn't suited to handling complex transactions, but could take pressure off the branches by looking after simpler operations such as credit card applications and maintaining current accounts," he said.
Boorman also said that the importance of a branch network might force some stand-alone Internet banks to establish some form of branch presence. "There are only a limited number of people who have Internet access so that reduces their customer base. In order to counter this, these e-banks could establish a physical presence and, as such, tie-ups with retailers are likely," remarked Boorman. "For example, SkandiaBanken in Sweden has launched a new on-line bank in partnership with the Co-op, which will involve it developing a presence in supermarkets."
Despite many stand-alone Internet banks failing and traditional banks cutting or scaling-back their on-line offerings, the Datamonitor report found providers optimistic about the future of e-banking. According to the report, 28 percent of retail banks believed that they will handle more than 60 percent of current account applications on-line by 2002, and 27 percent said they will handle the same level of credit card applications over the Internet over the next year.
The reported also predicted a positive future for mobile and digital TV banking, with the number of Europeans involved in mobile banking growing from 1.1 million currently to 27.1 million by 2005, and digital TV banking user figures rising from 0.75 million presently to 9.81 million within four years.
Datamonitor can be found at http://www.datamonitor.com
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