Banks stampede into virtual arena

Competition in the online banking sector is heating up as New Zealand banks vie for the plum customers. Among them, ANZ has just expanded its Internet offering and allows customers to apply for home loans online as the first step in its move on to the Internet.

Competition in the online banking sector is heating up as New Zealand banks vie for the plum customers.

Currently only ASB Bank, its subsidiary BankDirect and National Bank subsidiary Countrywide Bank have full customer-oriented online banking packages.

ANZ has just expanded its Internet offering and allows customers to apply for home loans online as the first step in its move on to the Internet. The bank's spokeswoman, Samantha Shaw, would not comment on future plans, saying the bank is focusing on system conversion and Y2K.

New Zealand's newest bank, AMP Bank, also has plans for the online world and will follow in BankDirect's footsteps by setting up an entirely virtual presence early next year, according to recent press reports.

BNZ already offers business to business customers its Buy Line system for online merchant transactions. This service will be joined by a consumer service "in the third quarter" of 1999 says corporate relations manager Sarah Hensley.

"We're well underway with Internet banking," says Hensley, who describes the site as "magnificent in terms of features and functionality". Although she wouldn't go into detail, Hensley says the site will have "more to offer" than current Internet banking sites. She says the site will have a similar look and feel to BNZ's parent company, National Australia Bank's site.

"It's not just a copy, however, but that should give you some idea of the sort of thing we're aiming for."

BankDirect is the only completely online bank in New Zealand at the moment. Acting general manager Valerie Walshe believes there is enough room in the market for more players, and believes BankDirect's emphasis on service will see them well positioned to take on any newcomers.

"If you look at the Nielsen figures, or Jupiter, they're all saying Internet usage is going through the roof. I think the banks are looking at the profile of people who do use the Internet and they do tend to be the preferred segment of the market."

Recently BankDirect has added functionality that allows users of Microsoft's Money or Intuit's Quicken to download directly from the BankDirect site. Walshe hopes to add other formats.

"We're looking at things like ASCII because not everyone's got Money or Quicken. I've seen some pretty sophisticated spread- sheets that people do their budgeting on."

Walshe will also be keeping an eye on the handheld PC market, as portability is something BankDirect is very keen to work with.

"I want to be mobile. I've got a laptop, I've got a cellphone. It makes sense that if you're in downtime waiting for a meeting or whatever, you can work on those day-to-day chores." Walshe believes the handheld market is growing very quickly, especially as more work-related applications come online.

But it's the ASB Bank which currently has the lion's share of the online banking market with an estimated 15,000 customers.

"We have 100,000 visits a month, with users staying for an average of 10 minutes each time," says ASB Bank's general manager of technology, Garry Fissenden.

"We process 170,000 transactions a month online," says Fissenden, who says if FastNet were a bricks-and-mortar branch it would be one of the largest in New Zealand. As for concerns about increased competition, Fissenden just laughs.

"At the moment we're the only player in the game. When the others join in, we'll be able to drive the whole market, not just our segment." Fissenden is happier with the idea of a smaller slice of a much larger pie, and believes that ASB Bank's experience and reputation will draw customers over to FastNet from other banks.

"It's not just about adding new features, like Net Bills -- it's about giving the customers control over their accounts." He says ASB Bank's aim is to allow FastNet users to do anything over their PC that they can do in a branch.

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