Dr Andy Lowe, a lecturer in marketing at the Scotland's University of Strathclyde and an Internet banking expert, believes the fact that Hong Kong has not rushed forward into online banking is not necessarily bad news. He said: 'It's sometimes not such a bad thing to be a late starter. Hong Kong is in a very good position to benefit from the mistakes and successes that America and Europe have made in this area. The really key role that Hong Kong could have in Internet banking is as a platform for mainland China, because once the mainland enters the World Trade Organisation then there will be some massive retail banking opportunities. Hong Kong banks are in a unique position to develop Internet banking in China like no other place is.'

In Communist China many citizens do not have bank accounts and there is not so much weaning from traditional to online banking to be done. In Dr Lowe's view, Hong Kong banks can bypass "old-fashioned" means of banking to start offering online services immediately.

Dr Lowe also predicts a rosy future for Hong Kong's online trading sector, following last week's successful MTRC share offer, which was the first initial public offering (IPO) to be carried out online in the SAR. However, much depends on server speed. Dr Lowe said: 'The availability of affordable high-band communications is a really vital requirement.' A slow connection, he said, would be 'a very major limitation to personal retail online trading.'

The difficulty for traditional banks in moving towards the provision of online services is that there are so many players wanting to win over all-important customers. A key worry, it seems is that the customer service and marketing strategies offered by new entrants may outstrip anything traditional banks can come up with. Dr Lowe believes Hong Kong banks need to change the way they think in order to survive these challenges. He said: 'Small and medium-sized banks need to find the right niche to survive. These banks will probably have to group together in some sort of alliance.'