First-E, Britain's first Internet-only bank, will be launched later this summer and already it is expected to take advantage of its lower costs to offer higher savings rates than its competitors.

Although Irish holding company, Enba, is behind the project, a similar Irish operation is still some way off. However, financial services companies here are increasingly taking to the World Wide Web, offering more and more opportunities for customers to use the Internet to organise their finances.

The Internet started out as and remains a valuable source of information but increasingly it is becoming more than that - banks, insurers and stockbrokers are starting to consider its possibilities as another distribution channel alongside their direct sales, telephone and branch operations.

In addition to the convenience of being able to compare different companies and their products without ever leaving home, the lower administration and promotion costs associated with the Internet can lead to cost savings for consumers in some instances.

The Irish Bankers' Federation (IBF) says the evolution of financial services has tended to be in stages. Institutions first provide brochure and product or rate information before moving on to offer loan calculations and application facilities.

The next stage is to provide account transfers and inquiry services before offering payment requests and finally moving to a full banking service.

The IBF says a number of Irish financial institutions are making steady progress through the various stages, but most observers say that in the banking industry, AIB and Bank of Ireland are leading the pack.

According to Mr Michael Hennigan, managing director of Finfacts, an online financial information service and author of a report on Web-based financial services, most Irish financial institutions are still at the brochure stage.

"The standard of Web service in Ireland is basic. It's mainly just brochure sites with very little in terms of dynamic content and interactivity. The main emphasis is on product and service description," he says.

He says AIB and Bank of Ireland are the leading online financial services providers in Ireland and although they may lag behind US banks like Wells Fargo and the German and Swiss institutions, they are ahead of British rivals such as NatWest.

Both banks offer a 24-hour online banking service which allows registered customers to view their personal account balances and account transaction details, to transfer money between their own accounts and to pay utility and credit-card bills.

At present, payments to third parties other than the utilities is not possible but both banks say it is an issue they are working on.

To access the sites, customers must first register, obtaining a PIN number and password or other information which can be used at a later date to verify the customer's identity.

Getting onto the sites is relatively easy although users of the Bank of Ireland site have been experiencing some difficulty of late. The bank says that this is because it is carrying out improvements to enhance the service.

Both banks' websites also provide customers with a wide range of information on their product offerings. AIB, for example, provides a loan calculator to help customers work out their repayments on a personal loan, while Bank of Ireland allows users to apply for home loans online and provides them with pre-approval although the application has to be backed up later with the appropriate documentation.

The sites also have links to all of the banks' subsidiaries so customers can check out how their investments are performing or they can see how the stock market is faring by linking to the Goodbody site, for example.

Stockbroking has been to the fore in the global financial services sector in terms of deploying the Internet to its advantage. The huge growth in online share dealing in particular has attracted retail investors to the market that had never bought stocks before.

Although Internet share dealing is not yet available in the Republic for technical reasons, the Irish Stock Exchange hopes that its link-up with the Paris Bourse will allow the introduction of such a service next year.

Meantime, Goodbody and NCB both have good sites where users can access the brokers' reports and Irish stock prices, which are updated throughout the day.

However, the progress made by the banks and stockbrokers has not been matched by the insurance industry. Mr Hennigan says that European insurance companies generally - even giants like Axa - are lagging well behind their US counterparts as well as other sectors in the industry.

Both banks say a growing number of customers are availing of their online services. Bank of Ireland says 10,000 customers are now using its Banking 365 Online service over the net while AIB says the numbers logging in to its service are growing by 10 per cent a month.

"If our Internet bank were a bricks and mortar bank it would be larger than some of our major city-centre branches such as Foster Place and College Street," says Mr David Roberts, e-commerce marketing manager with AIB.

He says AIB expects an explosion in the use of its online services over the next few years and believes the numbers using the service may double, if not triple, by the end of this year alone.

Mr Hennigan also believes that it is an area that is set to grow and which should ultimately work to the advantage of the consumer. He cites a recent report from Forrester Research which says that nearly 10 million Europeans will seek financial guidance via the Internet by 2002.

"The Internet empowers the financial consumer by making comparison-shopping convenient," he says. "The protection given to many financial service companies by the difficulty of finding comparative information is going to disappear in coming years."

His Finfacts site provides Internet users with a wide variety of financial information including the full range of available mortgage, deposit and loan rates, which are updated weekly, and information on unit-linked fund performance, updated quarterly.

The site also contains information on restaurants and even new car prices, allowing users to make comparisons between the various products on offer without ever leaving their chair or lifting the phone.