Allied Irish Banks (AIB) announced yesterday that it has dropped plans for a standalone internet bank and is instead going to focus on developing and expanding 24 hour-online, its existing online service, as its core Internet offering for the Irish personal banking market.
AIB announced earlier this year plans for an independent Internet bank in response to criticism from some analysts about Irish banks' failure to develop an e-commerce strategy, but a review of AIB's own e-business strategy has prompted the bank to abandon its plans, coupled with the prediction that customer take-up of online banking services will not be as quick as had been hoped at the outset. AIB says that Internet-only banks worldwide have been slow to attract customers, while existing banks have been quick to match and exceed the services offered by the new e-banks.
AIB’s Head of Electronic Banking, Billy Andrews, commented: 'In this fast-moving market, it is clear that timing and customer preference are as important as technology. Our extensive research in the e-business area has led us to the decision that integrated rather than stand alone is now the right approach in Ireland. AIB has made significant advances through the development of this initiative. And these will enable us to offer a superior online service through 24 hour-online. AIB remains committed to harnessing the full potential of the Internet for its customers through its e-business strategy.'
AIB is not alone in its uncertainty over pure Internet banks and it's a worldwide uncertainty. Toyko-based Sanwa Bank Ltd, which is merging with Tokai Bank Ltd and Toyo Trust & Banking Co to form the world's fifth biggest lender, announced this week that it is cancelling plans to set up a standalone Internet bank. And Dublin-based Internet bank First-e is laying off a number of staff in the face of adversity.
The way forward for AIB at least seems to be the development of its current online services. The bank said in August that 56,000 Irish customers have signed up for Internet banking since the start of the year while 30,000 customers signed up in the US and 14,000 in Poland over the same period.
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