Datamonitor's new "European eBanking Market Update" said that over the last 12 months investments in e-banking technologies fell from USD2.1 billion, to an estimated USD1.7 billion in 2002. But customer growth in this segment of the banking industry remains incredibly strong, the report added, and is poised to hit 75 million by the end of 2005. This compares to just 23 million users in 2000 and represents a more than 50 percent increase on the 49 million Europeans who are using such services in 2002.
According to the report, which said that Europe's banks have put e-banking investment on the back burner, 26 million Europeans have signed up for e-banking services in the last two years.
"It's almost an organic development," explained Christine Skouenborg, financial services technology analyst at Datamonitor and author of the report. Skouenborg told ElectricNews.Net that the growth of consumer e-banking follows the rise in Internet penetration in Europe as a whole; the nations with the biggest Web populations tend to have the most e-banking users. She said the increased functionality of e-banking services helped attract customers as did heavy marketing pushes from banks.
"Banks are looking to migrate their customers and services on-line. That, in conjunction with the fact that the population at large is getting more tech savvy, will ultimately lead to more e-banking customers," she said.
"But it is important to remember that banks are no longer viewing their Internet channels in isolation," Skouenborg added. "Rather banks are focusing on integrating and optimising all their channels, so as to achieve product and service consistency across them all and let customer relationship management projects come to fruition."
Skouenborg said that any recovery in e-banking investment will be driven by the desire of banks to have unified e-banking systems in place and their efforts to make such systems easier to use and more efficient.
Skouenborg's report also noted that the cutbacks in development for new e-banking services will result in fewer new applications for customers. Specifically, the report said that tools such as account aggregation, mobile banking and on-line advice have "dropped significantly down banks' list of priorities." More important projects such as multichannel integration and process integration to let banks sell multiple financial products across both the Net and through traditional channels have the top spot in terms of priorities.
The report said e-banking uptake was especially strong in the UK, Germany and the Nordic region. "These constitute the largest and most technologically advanced e-banking markets in Europe and together, they will account for nearly 55 percent of Europe's e-banking customers by the end of 2002," Datamonitor said.
With 9.8 million users, the UK is the biggest single market, followed by Germany with 8.5 million and the Nordics with 8.2 million. The report also said that by 2005, Germany will overtake the UK with 15.4 million e-banking customers, 1.4 million more than in the United Kingdom.
Markets such as Italy, France and Spain, which have fewer e-banking users at 4.6 million, 4.7 million and 4 million respectively, have experienced "phenomenal" growth over the last two years as well, and will continue to do so, Datamonitor said.