The service will initially enable users to access information, but the building society is promising a full transactional service by the summer.
Nationwide believes that it has to provide customers with as many channels as possible through which to access banking services - as soon as possible - if it is to grab a significant market share.
Internet TV is a relatively new technology and Terry Kaye, electronic access controller at Nationwide, admitted that the building society has no idea how many people will use the service.
"It's very difficult to conduct market research into these things [new Internet channels]," said Kaye. "If it's a new technology people will say they'll use it."
Analyst group Gartner has predicted that 15 million homes in the UK will be able to access the Internet through their TVs by 2003. Kaye points out that 150,000 homes already have Internet TV access and he hopes Nationwide's early move into the field will give it a long-term market presence.
Alexander Kopriwa, senior programme director at analyst company Meta Group, said, "I think this is an excellent idea. It shows us that the financial industry is transforming and becoming digitally oriented."
He also pointed out that the end-user experience is key to success. "It depends how it is implemented, how reliable it is, how user-friendly it is," Kopriwa said.
Nationwide has been working on the Internet TV service for the past three months. It has built technology based on Component Object Model and Extensible Markup Language (XML) that enables it to roll out the service on one particular device, then tweak and use it to develop services for other channels.
To use Nationwide's Internet TV banking service, users will already have to be signed up to Nationwide's full Internet banking service.