U.K. Users Lead Europe's Online Banking Charge

Banking Web sites attracted more than 5 million U.K. home Internet users in July of 2001, up from less than 4 million in January, according to data from NetValue.

Britain has more visitors to banking sites than any of the other major European Internet markets, and an increase in online banking among women is one of the reasons why. Women make up 53 percent of the new online banking users in Britain in 2001. Figures for women banking online are up more than 60 percent since January, NetValue found.

The average duration of visits to online banking sites in July reduced from 28.1 minutes to 22.3 minutes.

“U.K. Internet users are showing that they are comfortable banking online,” said NetValue’s Alki Manias. “However, users are also spending less time online, suggesting they know their way around the sites, and what they want to do there.”

Lloyds TSB had 64 percent of the visitors to its Web site, lloydstsb.com, making a secure connection in July, which means they may have made a transaction.

Around Europe, the French online banking audience has increased by one-third in 2001. In Sweden, 51.4 percent of Internet users use banking sites. Almost half (48.1 percent) of Norway’s online population and 44 percent of the Internet users in Denmark have the next largest proportions of online banking users.

Online banking in Germany, on the other hand, has actually decreased since January 2001, according to NetValue. Italian online banking users spend 42.3 minutes online per month, almost double the U.K. figure.

According to a report by Datamonitor, 75 million Europeans will be banking online by 2005, and the PC will remain the most popular online channel for banking services, followed by wireless devices and interactive digital television.

Datamonitor’s report, “eBanking Technology in Europe 2001”, forecasts that the number of customers using PC-based Internet banking services over the next five years will increase from 23 million at the end of 2000 to more than 75 million in 2005.

The report found that, despite the saturation of many European markets and the negative outlook for Internet investment, banks are being successful in migrating their customers onto the Internet, giving them plenty of reasons to continue investing strongly in eBanking services in order to support this growth. Datamonitor predicts that the size of the e-banking technology market will almost double over the next four years, growing from $2.7 billion in 2001 to nearly $5 billion by 2005.

Germany, Britain and the combined Nordic markets of Denmark, Finland, Norway and Sweden will continue to account for the greatest number of Internet banking customers; unsurprising given that these are the regions where PC penetration is highest and e-banking services most advanced. Italy, however, will be the fastest-growing market, exhibiting a compound annual growth rate of 70.9 percent from 2000 to 2005, as leading banks seek to roll out aggressive e-banking strategies to attack this relatively underdeveloped market.

Datamonitor also takes a bullish view of the adoption of mobile phone banking. While initial uptake of WAP-based services has been limited, the advent of 2.5 and 3G networks will allow for richer banking services to be delivered via the wireless channel. As a result, Datamonitor forecasts almost 35 million customers banking on WAP by 2005.

“We are particularly excited by the potential of mobile devices. Although there has been some initial customer disappointment in WAP services, we firmly believe that, when higher bandwidth networks and suitable handsets become widely available, mobile banking will become a killer m-commerce application,” said Siân Jones, eFinancial services analyst at Datamonitor. “Our research has shown that banks are very committed to investment in this area: after all, mobile phones are ideal for receiving timely financial information. These kind of services are highly ‘sticky’ should also help build customer loyalty.”