The adoption of Internet banking across Europe is set to soar over
the next few years signing up 75 million users by 2005, according
to new research.
The increased usage will not only open up new opportunities for
banks, but also benefit technology vendors operating in the
financial services arena.
In its survey eBanking Technology in Europe 2001, Datamonitor
predicts that technology expenditure within this sector will nearly
double between 2000 and 2005, rising from $2.7bn (£1.9bn) this year
to almost $5bn by 2005. The UK banking technology sector will be
worth some $1.2bn by 2005.
One of the key issues for any financial service operator providing
e-banking services in the coming years will be integration. "An
integrated eDelivery infrastructure must be the long-term goal for
any bank and many retail banks will increasingly attempt to unify
their 'e' and 'm' infrastructures over the next few years," says
the report.
However, a separate research study conducted by Datamonitor and
e-business application provider PeopleSoft, highlighted the
challenge of achieving this target.
Of the 342 European financial services institutions questioned by
the pair, 19% of respondents said legacy integration and
implementation was causing them the most pain when it came to
implementing e-banking infrastructures.
The eBanking Technology report predicts that PCs will remain the
most common means of accessing online banking services, although
wireless devices and interactive television will play an
increasingly prominent role in the latter part of the period.
Datamonitor predicts a dramatic increase in mobile banking usage,
forecasting 35 million users by 2005, as long as rollout of GPRS
and 3G mobiles is not delayed.
However, the report points out that there is unlikely to be one
"killer" channel for the e-banking sector. Rather, banks and other
financial institutions should implement a mixed channel approach.
"Banks will implement a range of functionality that allows them to
add real value to their service offering, helping to transform the
Internet into a service, as well as an acquisition, channel in
order to maintain their customer base," the report said.
This strategy is already being deployed by many UK financial
institutions. In recent months building society Nationwide has
rolled out numerous e-banking options, including a WAP service, a
PDA offering and interactive television service, to complement its
PC banking option.