European financial institutions are turning to the low-cost alternative of Web-based accounts to gain market share.
A report on deregulation and restructuring in the region revealed the number of European online banking sites nearly doubled in the last six months, climbing to 1,265 from 703. By way of comparison, the number of U.S. banks offering Net-based banking rose to 386 from 184 during the same period.
This rise in Internet and telephone-based direct banking is concentrated in continental Europe, where banks have been slow to close expensive and unprofitable branch networks to cut costs.
The new breed of European online banks is seen as a way to fend off overseas competitors and generate economics of scale by allowing the financial institutions to expand their services in other European countries.