The number of Britons using online banking services is set to hit 11.5 million by the end of the year, according to a new report from Datamonitor.
The number of online bankers has almost doubled since the height of the dotcom boom in 2000 when they numbered 5.6 million. Moreover, traffic to online banking sites in the UK increased by 65% in the twelve months to June (see
UK Surfers Check Out Online Banking). However, this does not necessarily mean that consumers are abandoning traditional financial institutions.
Internet-dedicated banks such as Smile, Cahoot, First Direct and Intelligent Finance now have around 2.45 million customers. With their limited overheads and lower processing costs, these organisations are able to offer favourable interest rates on a range of products including current accounts and credit cards.
Nonetheless, the majority of online bankers have remained faithful to the high street on the basis that they need to carry out transactions in person. In this context, the web services offered by the likes of Abbey National, Barclays and HSBC are seen as an extension of their core business.
Across Europe, Datamonitor estimates that more than 80 million consumers will be banking online by 2007 (see Sixty Million Europeans To Bank Online In 2003).
