E-Banking

Sources (1),(2)

(The following is an article provided by The Warsaw Voice - citations are also included)

"Internet banking services are increasingly popular. Even though virtual banks began operating in Poland only two years ago, they have already enlisted way over half a million clients between them.

The growing popularity of virtual banks stems from the fact that their services are much more attractive than those offered by traditional banks. First, an Internet account takes much less time to set up and use. Second, virtual banks offer favorable terms, including free accounts, free transfers and free payment cards. Another big advantage is that interest on these accounts is several percentage points higher compared to that of traditional banks. This results from the fact that virtual banks do not have to build their outlets, provide them with expensive equipment and hire a large number of people.

The first fully virtual bank to begin operating in the Polish market was mBank, owned by BRE Bank. At the end of November 2000, when mBank was launched, the size of the Polish e-banking market was estimated at some 50,000 accounts; mBank needed less than five months to double this number. In April 2001, the number of eKonto and eMax accounts opened at mBank exceeded 50,000. At the moment, mBank already has 370,000 clients, including 100,000 enlisted over the last five months. According to mBank's forecasts, by the end of the year the number of the bank's virtual accounts may rise to 420,000. The bank's accounts already hold more than zl.1.6 billion.

Another fully virtual bank in Poland is Inteligo, which started operations in May 2001. Inteligo is the brand name of financial services established by Inteligo Financial Services SA and Bankgesellschaft Berlin AG, one of the larger European banks. This past October, Inteligo was taken over by Poland's largest retail bank, PKO BP, which is pinning a lot of hope on the development of Internet banking. "The combination of PKO BP-with its comprehensive range of services and the country's largest network of branches and ATMs-and the modern and comfortable Inteligo accounts, offers us an opportunity to present an attractive range of banking products, both for individual clients and small businesses," said Jacek Oblekowski, a board member of PKO BP.

In addition to traditional banking services such as transfers, pre-defined payments and the Visa Electron card, Inteligo offers new innovative services such as EmailMoney. The service allows transactions to be made by means of e-mail. In order to make a transfer, you do not need to know the account number of the recipient. You only need to enter their e-mail address, the transferred amount and ask an additional verification question. Another novelty in the Polish market is the QuickMoney service, or instant transfer. Money is transferred to the recipient's account immediately after placing an order.

Oblekowski said that next year the Inteligo account range would be expanded to include new products such as buying and selling investment fund units in a service offered together with PKO Credit Suisse. Inteligo clients will also be able to take advantage of a new cash credit line.

At the moment, Inteligo has almost 180,000 clients. By the end of the year, it plans to increase that number to 200,000 and then shoot for 330,000 next year. Client's deposits are also expected to increase markedly from the current level of about zl.500 million.

Volkswagen Bank, which in April 2001 launched its virtual outlet, Volkswagen Bank Direct, also believes in the rapid development of virtual banking in Poland. So far, this virtual bank has opened 18,000 accounts, accounting for more than zl.380 million. Volkswagen Bank Direct plans to have more than 20,000 accounts by the end of the year, with the value of the deposits expected to rise to zl.500 million.

Apart from fully virtual banks, several large Polish banks also offer e-banking services, thanks to which clients have access to banking products and services via the Internet. Banks including Pekao SA, BZ WBK, BPH, Lukas Bank and ING Bank Slaski have virtual branches." (3)

Another interesting expectation is that "the number of people using online banking will double by 2004. Industry analysts expect the number of online accounts to rise as high as 1 million by the end of 2002, and 3 million by 2004. Despite those high numbers, however, analysts also state that online banking accounts for only 10% of Poland's total banking activity and is not expected to generate huge cost savings for the financial services sector." (4) "The Polish banking Association states that there were about 526,000 online bank accounts in Poland by the end of January 2002, including about 40,000 corporate accounts. If banks are not completely turning toward online banking, they are at least incorporating the Internet to accomplish some service." (5)

(The remaining paragraphs are from EuropeMedia.net - the citations are included)

"I-Metria conducted research among Internet users with a current account held with electronic banks and those with accounts in traditional banks without an e-banking option. The research indicates that the promise of benefits in the form of savings on operating costs from the introduction of an electronic banking service is illusory. The launch of an e-banking channel does not offer short-term return on investments. Clients of banks that offer virtual banking services also expect their banks to retain their bricks-and-mortar outlets. A surprisingly large proportion of clients of virtual-only banks (mBank and Inteligo) would be happier if their bank had real branches (40 per cent). Analysts suspect that a virtual bank's lack of physical branches presents no object to clients when they open an account, but becomes a source of unease over time.

56% of those taking part in the research, who do not have e-accounts and use only traditional banks, declared that they would be interested in electronic banking. They claimed that if their bank offered them Internet access to their account they would take advantage of that option. 44% of Internet users are not interested in e-banking. Nevertheless, of that figure, 19 per cent declared that if their current bank gave them the option of Internet access they would consider trying it.

The main reason Internet users gave for opening a virtual account was the financial factor. Those internet users without a virtual account but interested in trying the service gave as the main argument in favor convenience (87 per cent of respondents), in the form of avoiding queues, ease of service or the facility to use several services in one place. These types of clients, according to analysts, are not actively seeking the best offer on the market, but rather tend towards waiting for "better times to come along in their own bank". The 2nd most popular argument in favor is the factor classed as finances (i.e. higher interest, no fees and commission, or promotions), which was given by 13 % of respondents.

The third was the 'cool' factor (i.e. the perception of internet services as interesting, fashionable, modern; also conditioned by media hype). This was a sufficient reason for 3 per cent of the subjects. The reasons internet users gave for not wanting to open an e-account were the absence of necessity (for 62 per cent), the security issue (for 50 per cent), infrastructure-related problems, i.e. slow, expensive access to the internet - for 6 per cent - and inconvenience (2 per cent). Customer satisfaction levels with e-banking services (offered by virtual-only banks and traditional banks with internet access channels) are higher than for traditional banking services." (6)

SOURCES

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