UK online banking to lose out to competition

Offerings poor, says survey

Seven million people will be banking online by 2003, but UK companies could lose out to new competitors by not offering enough to consumers. According to a report from Fletcher Research, the Web’s potential in the financial market is huge, but online offerings are currently poor. The report’s findings show that as UK customers are ready to go online: in 1995, 10 per cent of interviewees thought they would be banking online by 1997, but in reality only 0.3 per cent of the UK population manage their finances on the Web. This discrepancy is due to companies offering an inadequate service, said Fletcher. Few companies are encouraging customers to move online – only five per cent offer discounts. Also the quality of Web sites is low. 22 per cent of sites do not have an email link to the company, and few make any attempt to generate leads from visitor to the site. The report says that this is a dangerous strategy for the companies to take since they will be facing tough competition from US companies and other competitor, and risk losing market share. US companies are using the reach of the net to compensate for their lack of physical presence in the UK. “British personal finance companies have missed the opportunity to build a loyal online customer base over the past two years,” said Benjamin Ensor, the author of the report. “This market has tremendous potential for growth, but UK companies are failing to grasp the nettle.” Unless UK companies start to take the market seriously, they will find themselves out in the cold, he said. The report is based on the examination and analysis of 115 financial Web sites, and follow up interviews with 50 industry players. ®