European Online Banks Need To Innovate, Says Study

by Philip Morton, Investors Offshore.com

16 January 2002

According to a new report from Forrester Research, online banking in Europe could reach 110 million users by 2005, but is in need of 'sustained innovation' if it is to enhance its profitability.

The Forrester figures revealed that at the beginning of 2002, more than 42 million Europeans bank online, and the service continues to attract around 1 million new customers per month. The research company believes that the continuing popularity of online banking, despite some recent lean times, is due to the ubiquity of the internet, as security concerns and fears of excessively complicated procedures are forgotten by increasingly computer literate populations.

However, the figures show that some mainstream banking customers may need a little more encouragement to migrate online. In its report, Forrester suggests that online banks must 'reiterate the security of their customer accounts', and offer a guarantee against internet fraud. Other suggestions included simplifying site functions, and reducing the number of clicks necessary to complete a transaction.

In closing, the Forrester Research report concluded that: 'while racing onto other platforms won't guarantee multi-channel success, banks must make the PC web their financial services hub, with branches, call centers and new online channels in a supporting role.'

Recommended