For Banking, the Future is Online

1999-04-16

A spokesman for NatWest said yesterday that Internet banking was a “luxury service” and that NatWest would not be closing any high-street branches. There are two ways in which these remarks can be interpreted. Firstly, that NatWest do not see the Internet as something which will significantly affect their business. This interpretation goes against the grain – the Internet is speeding up trends which are already well-established, such as the market’s acceptance of telephone banking. It is very likely that in the future, a significant proportion of banking transactions will be undertaken without a branch visit. Such a vision is difficult to realise at the moment, as the provision of facilities is dependent on customer adoption and customers are notoriously conservative. However, it is only a matter of time before the UK consumer decides that it is, indeed, more convenient to dial a number or type a Web address rather than try to find a parking place on a busy street in office hours. The second way to interpret the remarks is that NatWest are discussing the short to medium term. We must hope that this is so: when the use of online and telephone service reaches critical mass, no business will be able to avoid its effects.

(First published 16 April 1999)