UK banks have come under fire from e-business firm Netlife for failing to take advantage of online banking at the risk of losing out to foreign competitors.
Citing its own research, Netlife suggests that traditional high-street banks are failing to cater for the needs of online customers. Just 5 percent of UK banking takes place online compared to 12 percent in Germany and 16 percent in France.
Managing director of Netlife, Philip Brown, believes British banks are in serious danger of losing out to foreign players. "A particular threat is the aggressive cyber-banking policy being pursued by small banks across Europe. Foreign banks are capitalising on the UK banks' hesitation and moving in on the UK market," he says. Britain's first virtual bank is to be launched this summer by French group Banque Escompte.
Chris Rawlins, director of the British Bankers' Association (BBA) disagrees and says British banks are not the laggards Netlife suggests. "Most banks now offer some form of Internet banking and they are customer-led on this," he says.
But despite Rawlins' protests, Tony Blair is worried enough to have commissioned a report that criticises UK businesses for falling behind US and European rivals in exploiting the Net. Blair's report will be released in September.