Put it on my account

Banks are offering net access to get customers on-line

WHO DO you turn to if you want to connect to the internet? It could be a specialist internet company, or an on-line service such as CompuServe or AOL. It could be a telephone company: BT and Cable and Wireless are the largest phone companies selling internet connections.

Or it could be your bank. The banks know the internet is important for their future. All the high-street banks now either offer, or are developing, some form of computer banking.

There are compelling reasons why banks use internet technologies. They are cheap, flexible and quick to develop. The internet is also convenient for customers to use, not least because one piece of software - an internet browser such as Netscape Navigator - will work with different banks' on- line services.

Banks and building societies want to encourage their customers to use the internet. If enough people do, they will save a lot of money. On-line banking is set to grow rapidly when cheap and easy internet access arrives, perhaps on the back of digital television. In the meantime, some financial institutions are taking their own measures to persuade customers to connect to the net.

The Nationwide building society is developing its own internet service, which it will launch this summer. Members will be able to rent a full internet connection, with access to e-mail and the web, from the building society.

The society says it is not trying to compete with existing internet companies but wants to offer additional benefits to its members, one of which is an internet connection. Convenience is also an issue, especially as the society has a comprehensive internet banking service. "We want to give customers an end-to-end service from Nationwide," says Alan Oliver, a spokesman.

Nationwide is using BT to provide its internet service. Prices are not yet fixed but, says Mr Oliver, they will be "competitive".

In time, this may come to mean "free" as banks make more use of the net. Last week Citibank announced a deal with Virgin Net. Customers who open an account with Citibank and register for its forthcoming internet banking service before the end of this month will receive a year's free internet access from Virgin. This Citibank account isn't open to everyone - you have to earn pounds 30,000 or more a year and pay your salary into the account.

Citibank already offers a PC-based banking service, and the alliance with Virgin Net is part of the bank's preparations for internet banking. Citibank has only been open for business in the UK for three years and electronic banking is at the heart of its business plans.

The main high-street banks are wary of discussing cost savings from PC or internet banking, not least because of sensitivities surrounding branch closures and staff cuts. Some say the service costs them money. This is supported by research from the United States, which suggests that on-line banking only brings savings when customers no longer use branches.

Citibank argues that internet banking does save money, even when compared with its existing, low-cost phone banking service. "Because we do not have branches, the internet is at the core of our growth," says Peter Wilkes, the marketing director.

Linking net access and banking makes sense. Both suffer "churn" - customers taking their business elsewhere. If an internet account is tied to a bank account, it is a reason not to switch.

Citibank and Virgin Net believe that by packaging their two services, they will both win new customers. "There is inertia in moving a bank account," says David Clarke, chief executive of Virgin Net. "We had to work out a compelling reason to move accounts."

Mr Clarke does not rule out further offers, such as a free modem or even a discounted or free internet access device. For now, though, the main reasons to use internet banking remain lower charges, better interest rates - and no queues.

q Links: http://www.citibank.com; http://www.nationwide.co.uk.

Start your day with The Independent, sign up for daily news emails
Danny Cipriani of England breaks clear to score his second try
Life and Style
New research says leaving your desk can help you to avoid serious illness
Arts and Entertainment
tvSPOILER ALERT: Like a mash-up of 28 Days Later, Braveheart, The Killing and Lord of the Rings, this GoT episode was a belter
ebooksAn unforgettable anthology of contemporary reportage
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Payments Operations Assistant

£23000 - £25000 per annum: Recruitment Genius: They win lots of awards for the...

Recruitment Genius: Telephone Debt Negotiator

£13500 - £20000 per annum: Recruitment Genius: This nationwide enforcement com...

Guru Careers: Communications Exec / PR Exec

£25 - £30K: Guru Careers: We are seeking a highly-motivated and ambitious Comm...

Guru Careers: Pricing Analyst

£30 - 35k: Guru Careers: We are seeking a Pricing Analyst to join a leading e-...

Day In a Page

On your feet! Spending at least two hours a day standing reduces the risk of heart attacks, cancer and diabetes, according to new research

On your feet!

Spending half the day standing 'reduces risk of heart attacks and cancer'
Liverpool close in on Milner signing

Liverpool close in on Milner signing

Reds baulk at Christian Benteke £32.5m release clause
With scores of surgeries closing, what hope is there for the David Cameron's promise of 5,000 more GPs and a 24/7 NHS?

The big NHS question

Why are there so few new GPs when so many want to study medicine?
Big knickers are back: Thongs ain't what they used to be

Thongs ain't what they used to be

Big knickers are back
Thurston Moore interview

Thurston Moore interview

On living in London, Sonic Youth and musical memoirs
In full bloom

In full bloom

Floral print womenswear
From leading man to Elephant Man, Bradley Cooper is terrific

From leading man to Elephant Man

Bradley Cooper is terrific
In this the person to restore our trust in the banks?

In this the person to restore our trust in the banks?

Dame Colette Bowe - interview
When do the creative juices dry up?

When do the creative juices dry up?

David Lodge thinks he knows
The 'Cher moment' happening across fashion just now

Fashion's Cher moment

Ageing beauty will always be more classy than all that booty
Thousands of teenage girls enduring debilitating illnesses after routine school cancer vaccination

Health fears over school cancer jab

Shock new Freedom of Information figures show how thousands of girls have suffered serious symptoms after routine HPV injection
Fifa President Sepp Blatter warns his opponents: 'I forgive everyone, but I don't forget'

'I forgive everyone, but I don't forget'

Fifa president Sepp Blatter issues defiant warning to opponents
Extreme summer temperatures will soon cause deaths of up to 1,700 more Britons a year, says government report

Weather warning

Extreme summer temperatures will soon cause deaths of up to 1,700 more Britons a year, says government report
LSD: Speaking to volunteer users of the drug as trials get underway to see if it cures depression and addiction

High hopes for LSD

Meet the volunteer users helping to see if it cures depression and addiction
German soldier who died fighting for UK in Battle of Waterloo should be removed from museum display and given dignified funeral, say historians

Saving Private Brandt

A Belgian museum's display of the skeleton of a soldier killed at Waterloo prompts calls for him to be given a dignified funeral