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Gold/Mining/Energy : Cybersurf (CY.A) - Bridge between 20th & 21st Centuries -- Ignore unavailable to you. Want to Upgrade?

To: CocoBob who wrote (2230)	9/6/1999 5:54:00 PM
From: LABMAN	Read Replies (1) \| Respond to of 3243

online banking in the U.K, THE TREND.....only matter of time for a deal with a Canadian financial institution and Cybersurf Monday September 6, 5:03 PM The high risk of banking on a Net revolution By WILLIAM DAVIS Now that the peak holiday season is over, banks and others are stepping up their efforts to promote Internet services. Barclays (LSE: BARC.L - news) says that it is already switching over customers at the rate of 10,000 a week, but the most remarkable development has been the rapid growth of Egg, the Prudential's direct-banking arm. Egg, which accepts deposits only on the Net, has pulled in billions of pounds by offering a market-beating interest rate. It is an expensive game - the business is still making substantial losses and is not expected to break even until 2001. Clearly, though, the Pru is confident that it will eventually make money out of all those new customers. It is speeding up plans to roll out new products. Morgan Stanley Dean Witter, the big American investment bank, believes that Egg could 'significantly alter the landscape in UK retail financial services'. It has valued the business at £3.6 billion - a further striking example of the optimistic view so many people are taking of the Internet's potential. The Pru, however, will face increasing competition from American as well as British banks. Wingspan, the Internet banking offshoot of America's Bank One, is preparing to launch a British version. Until now, Internet banking has been mainly about convenience. Egg has shown that there is also a growing market for financial products. All the big players are extending their services, but they are unlikely to get very far unless they offer good value. Internet transactions cost much less to administer than those carried out in branches, and customers should be able to count on banks to pass on some of the savings. Many, however, seem to be more concerned with maintaining high margins on their retail business. Internet users tend to be the kind of people everyone is after - young, smart and well-off. They are also more inclined to shop around. By putting more information about comparative pricing into their hands, financial institutions risk losing business to their rivals. All this, of course, must be kept in perspective. Peter Duffy, Barclays' head of online banking, predicts that 10% of customers will be online within three years. If he is right, 90% will continue to do business through branches or on the telephone. According to The Economist, the 'new religion' in American retailing is convergence. Against all expectations, retailers are being forced to recognise the importance of having a physical presence. One reason, The Economist says, is a loss of faith in the pure web model. 'Many firms are now betting on the power of integrated shopping - combining stores, the Internet, catalogues, the telephone and eventually television.' Although retail banking services are clearly adaptable to the Internet, this approach also makes sense for financial institutions. Most of the Brit ish population is not online and those who are connected tend to see the Net as an addition to, and not a substitute for, their shopping habits. Many bank customers remain concerned about security. The Internet is a good place for bargain hunting, and will no doubt grow in popularity as more people go online and the technology improves, but talk of a 'revolution' is premature. The tough question for banks and others is how much emphasis they should put on web services. Internet-only banking is an intriguing concept, but it seems unlikely to become the dominant force in the foreseeable future. (This is London - Evening Standard)