A new Datamonitor report ‘European eBanking Market Update’ reveals that in the last twelve months, despite investments in eBanking technologies falling from $2.1 billion in 2001 to an estimated $1.7 billion in 2002, customer growth remains very strong and is predicted to reach 75 million by 2005 as banks begin to reap the returns made on the build-out of eBanking infrastructure in 2000 / 2001.
European banks have been extremely successful in driving customers to the Internet channel
Despite a challenging technology investment climate, customer uptake of eBanking has remained firmly on track over the past twelve months. Whereas there were just over 23 million European online banking customers in 2000, Datamonitor estimates that there will be nearly 49 million by the end of 2002, a staggering increase of 45% from 2000 as banks continue to migrate customers successfully to the Internet channel, particularly for transaction-based services and sales of more commoditized products.
Uptake remains particularly strong in the UK, Germany and the Nordic region. These constitute the largest and most technologically advanced eBanking markets in Europe and together, they will account for nearly 55% of Europe’s eBanking customers by the end of 2002. With 9.8 million, the UK has the highest number of online banking customers followed by Germany with 8.5 million then the Nordics with 8.2 million. In 2005, Germany will overtake the UK when Datamonitor predicts its online banking customers will grow to 15.4 million whilst the UK will have just over 14 million. The Nordics meanwhile will maintain third position with 9.2 million eBanking customers in 2005.
Spend on multi-channel integration and process integration will take precedence over second-generation functionality development
Despite successful migration of customers to the online channel, investment by European retail banks in new eBanking functionality is on the back burner. Having made significant investments in eBanking technologies in 2000/ early 2001, the economic climate has forced banks to reassess their channel priorities and cut back significantly on new development projects, particularly on the application side. This means that solutions such as account aggregation, mBanking and eAdvice have dropped significantly down banks’ list of priorities as banks shift their attention to more mission-critical projects such as multichannel integration and front-to-back process integration as cross selling multiple financial products across a range of channels becomes increasingly important.
Christine Skouenborg, Financial services technology analyst at Datamonitor, comments:
Continuing growth in eBanking uptake is clearly good news for banks, but it is important to remember that banks are no longer viewing their Internet channels in isolation. Rather banks are focusing on integrating and optimizing all their channels, so as to achieve product and service consistency across them all and let customer relationship management projects come to fruition. As a result, any recovery in eBanking technology spending will be fuelled mainly by banks’ efforts to achieve unified channel architectures and to enhance workflow processes.
Please visit http://www.datamonitor.com/all/reports/product_summary.asp?pid=BFTC0770 for further details on the European eBanking Market Update report.