Big-Name Banks and Brokers May Cater For Eastern European Investors

Jason Gorringe, Tax-news.com, London

08 January 2001

European financial services providers, be it banks or brokerage companies, are becoming increasingly interested in Eastern European markets, where both online banking and online broking are viewed as potential growth areas. The most suprising finding has been that there is a large number of high-net worth individuals in the region, who are being viewed as likely investors and therefore a niche market for the major European financial players.

Slovenia has been quick to embrace the Internet - in actual fact its Internet penetration, at 23 per cent, is higher than that of Greece and Italy. The disappointing element is that it has a small population and is not seen as a lucrative market. The better bets are Poland, Hungary and the Czech Republic.

Major German banks such as Commerzbank and Dresdner Bank see potential in online banking and other financial services, such as broking, although are reluctant to invest in costly networks. Poland is perhaps the exception, since Deutsche Bank 24, the online unit of the German giant, has included the now economically-strong country in its European strategy. It is not, however, putting its more sophisticated online brokerage services in place there.

Analysts say US players are not so keen to introduce themselves in the region, because of the backwardness of telecommunications. Investment in improving landlines has not been as forthcoming as investment in mobile phone technology.

The key revelation for financial services providers has been the fact that there are more high-net worth individuals in the region than many had originally thought. It can only be a matter of time before the huge array of offerings available to Western European and US investors begins to infiltrate into the east.

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