Online banking services from Bank of Ireland and Allied Irish Bank have been ranked 16th and 17th among Europe's top 50 banks.
However, a newly-published Lafferty Internet Ratings report on Web-based financial services indicates European banks still have a long way to go before they catch up with their US counterparts.
Bank of Ireland's site (www.bankofireland.ie) was found to have limited dynamic content and interactivity. The report said the provision of current interest rates, markets information and user-friendly content would do much to enhance the site. Similarly AIB's site (www.aib.ie) was found to lack dynamic content and interactive features.
Credit Suisse (www.creditsuisse.ch) topped the ratings for its many user-friendly features, including automatically updated information, daily markets information and interactive planners and calculators.
However, US banks are stealing the march on Europe with their online financial services. According to Mr Michael Hennigan, who compiled the Lafferty report (www.lafferty.com), financial services are driving US retail e-commerce. Online brokers in the US now control customer assets of $300 billion (£201 billion), equivalent to 10 per cent of total US consumer bank deposits. By the end of December, it is predicted more than a quarter of all US retail stock trades will be done over the Internet.
The report states that the key to establishing a transactional Web service is investment. According to Mr Tom Quigley, senior vice-president of InsWeb Corporation - the insurance website ranked number one by Lafferty - it costs at least $1 million to set up an instant online insurance quotation system. Credit Suisse is budgeting £7.5 million on its Web services for 1999, just under half of which will be spent on technology.
The US is driving the online financial services market in Europe, with Charles Schwab Europe, this week winning the race to provide the first fully automated online stock dealing system. Stocktrade, a British broker, thought it had won a fortnight ago when it launched its own online service. However, its customer accounts were only activated two days after Schwab switched its users from its existing online system - which required human intervention - to a new fully computerised service.
Now E*Trade, the US pioneer of online dealing, has said it plans to launch a British joint venture early next year. Last September, E*Trade announced it would spend at least $100 million on marketing its new website over 18 months.
Online banking is helping banks significantly reduce overheads. Market research group INTECO says the more often people bank online, the less often they visit branches, call bank customer service, or use ATMs. One interesting innovation addressed by the Lafferty report is a new "Build Your Own Bank" feature being adopted by some sites. The best example is on the Bank of America site (www.bankamerica.com) where users can create their own home page, detailing their financial topics of interest.
