A comparative analysis of the US and EU retail banking markets - Wsbi

Graph 19: Use of different distribution channels
in banking in some selected EU countries
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
Many banks are likely to see their existing branches
undergo a shift from convenience to excellence as
they specialise in providing more value added, expert
services while the more mundane tasks are taken
care of by electronic channels 391 .
6.4.2.2 Complementary channels
The number of ATMs in the EU grew by 52%
between 1997 and 2003. Looking at table R in the
table annex reveals that growth was particularly high
in Greece, the UK and in Portugal, and that all
countries in the EU 15 experienced positive growth
in that period, with the exception of Finland.
0%
Germany
Spain
■ Telephone
■ Mail/Fax
■ Internet
■ Branch
■ No response
France
United Kingdom
Italy
Sweden
Europe
Online banking is not a particularly popular distribution
channel in Europe. Looking at table AG in the table
annex reveals that it is only the third most commonly
used means to purchase or arrange banking services
in Europe. Of European consumers with internet
access, slightly more than one-quarter banked online
in 2001 392 .
Source: Datamonitor survey, impact 2001.
Further, banks in Europe increasingly recognise that the
financial benefits associated with improving branch
service make it a key business priority. In a 2005
branch banking survey 389 , 73% of retail bankers
interviewed expressed viewing branch service as
more important or significantly more important than
it was three years ago. This explains why in the last
few years Western European banks have invested
heavily in trying to transform often ageing cost
centres into profitable sales outlets with many
borrowing the ideas of successful retailers 390 .
Such is the importance of having a branch presence
in Europe that the prediction has even been made
that some standalone internet banks will soon move
to establish some form of branch presence, and also
that these new branches may not appear in the form
with which we are currently familiar, as tie-ups with
retailers are likely.
In Sweden, for example, SkandiaBanken has launched
a new online bank in partnership with the Coop
supermarket chain, which will involve it developing a
presence in supermarkets.
A distinct feature of European internet banking
however is the persistence of significant regional and
national differences, as follows 393 :
Scandinavian banks maintain their leadership both in
terms of market penetration and technological
sophistication. Thus, Nordea can boast of a customer
penetration rate of 29% (over 3 million customers)
and an integrated range of services including payment
and lending, securities brokerage and insurance.
In Germany, the biggest banks (DeutscheBank, HBV
and Commerzbank) serve more than 20% of their
customers on line, capitalising on the early passion
of German consumers for online brokerage.
UK banks, particularly the largest ones such as Barclays,
Halifax or Lloyds TSB, accelerated the deployment of
their online offerings in response to the perceived
competitive threat from newcomers such as Egg.
French banks continue to convert their wellestablished
customer base of first generation on-line
banking (Minitel) to the internet.
389 “Improving branch service: a priority for change”, Finalta, March 2005.
390 “Branch banking in Western Europe 2005”, Lafferty, 2005.
391 “Branches still rule banking in Europe”, M. Pastore, November 2001.
392 Datamonitor, Impact 2001 Survey.
393 Source: “Internet Banking Update”, C. Goldfinger, European Commission’s Financial Internet Working Group, September 2002.
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