Internet Investor
IT WAS a week in which the Prime Minister, Tony Blair, extolled the benefits of "e", e-commerce that is, and it also saw the launch of an Internet service provider aimed specifically at women which will no doubt be the favourite of one of his predecessors, (really).

It's been a busy few days for online financial services as well, with the launch of a new Internet bank, an online-only mortgage and a web- based broking service.

Although by no means the first mortgage to be offered via the Internet, Swiss bank Credit Suisse says its Promise mortgage product is the first all-online mortgage. It claims the entire application process, including credit checking, will take customers around 15 minutes to complete and may be completed entirely over the Internet.

Whether homebuyers are ready to do without the "hand-holding" of the more traditional mortgage arrangement process is another matter. How brave do you feel?

The new broker on the Net is SwissNetBanking, which offers you access to the US stockmarkets, charging a flat fee per trade of $29.95 with a minimum required deposit balance of $5,000. B ut you cannot use this service yet. It will open for account registration in October and aims to be up and running on 1 November.

In addition to what is on offer through your PC, HSBC unveiled its digital TV banking service and Egg has launched the UK's first Internet-based credit card with interest rates that are not just market-leading but so far ahead of the competition the gap is positively Grand Canyon-ish.

It may come as a surprise, but Egg is not yet even one year old. Launched on October 11, 1998, it has some 600,000 customers and manages pounds 6.7bn in savings. A recent IBM/Interbrand survey named it as one of the world's top 10 financial brands on the Internet.

The Egg card carries no annual fee, has an APR of just 9.9 per cent and an even more attractive rate of 4.5 per cent APR for the first six months on credit transfers. There are also other cashbacks and discounts available to card users.

Egg has discovered that to be a successful bank in the electronic information age, there is no need for a high street property portfolio.

This is a lesson being learnt by others, notably US banking group Citibank which is pursuing high net worth individual accounts over the Internet and now also by First-e, the banking arm of the Dublin-based holding company called, simply, enba, first mentioned in this column on 27 February. First-e has matched Egg's savings rate, offering 5.75 per cent gross on deposits of pounds 1 or more.

It would seem the days of the high street bank branch are numbered but perhaps the Web bankers should be looking over their shoulders as well. Research by Cyber Dialogue in the United States shows that almost half the people who banked on the Internet closed their accounts in the past year.

Of some 6.3 million online accounts, 3.1 million have already given up, citing poor customer service and complicated site navigation. There are, no doubt, lessons there for the younger web-banking businesses in the UK.

But the main threat to the high street bank, and to the web-bank, will come from digital interactive television, which will allow personal customers to transact their banking business from the armchair. HSBC's service is being phased in and it will not be until February 2000 that customers will be able to pay bills and transfer funds.

But from next month HSBC personal customers will be able to keep track of their balances and bank statements. Quotations for loans and mortgage repayment costs are already available. Other banks will follow where HSBC has led.





Robin can be reached at