Banks put online banking on hold

UK Banks are holding back on developing total online banking until after the millennium, according to Roger Miles, head of communications at the British Bankers' Association (BBA).

Many UK banks are putting a "freeze on technology" through 1999 in order to concentrate on the problem of the millennium bug. Miles told ZDNN: "Internet offering are being held back whilst the bug is an issue." After the year 2000 there will be a "dramatic change" with the possibility of total online banking, according to Miles.

This week has seen Virgin Direct and Guardian Direct announcing online financial services and most of the high street banks offer some level of Internet banking. According to the BAA, around 2 percent of accounts in the UK have Internet access.

According to IDC analyst James Eibisch there is no current service in the UK that "lets you do everything you would want." Despite the technology to provide such services being available, Eibisch believes the public will take some persuading to conduct personal finance online. "The technology is just the starting point, there is a lot more to do to overcome cultural resistance," he said.

Intel is amongst a group of investors waking up to the potential of cyber finance, with a share in a new Internet-based venture capital start-up called enba. A total of £10.4m has been invested in enba, which is based in Ireland. The company plans to offer a raft of Internet-based financial services. Details to be announced later in the spring.