The survey, carried out by Byline Research, covered 35 of the 67 remaining mutual societies. Of these only 43% have an e-commerce capability of any kind and only a few go beyond basic online application forms. Most building societies continue to rely on information-only Websites, states the report.

The biggest barrier to e-commerce, singled out by 66% of respondents, is the cost of implementation. Technology issues ranging from system integration to reliability and performance are also high on the list of concerns.

The surveyed building societies gave surprisingly low estimates when asked the cost of building an e-commerce platform. Forty per cent thought the cost would be between £20,000 and £100,000, a further 29% said they expected to pay up to £250,000. Only two firms put the cost of building a strategic e-commerce platform at £1 million or more.

Jerry Mulle, director of the ebusiness group, iE, says: "Some building societies are looking at nothing more than brochure-ware, while others are considering full on-line servicing. If they are not willing or able to throw money at the problem individually, these organisations are going to need to exploit their collective strengths to reach a solution."

Gordon Carr, director at Deloitte & Touche, suggests that the costs of building an e-commerce capability could be shared: "Building societies’ greatest strength lies in their ability to collaborate. The costs of a common e-commerce platform could be easily spread across a number of societies."

Despite the apparent apathy, building societies expect to forge ahead with e-commerce plans in the next 12 months. By this time next year, two-thirds expect to offer some kind of e-commerce service. The report also forecasts a dramatic increase in the number of e-commerce offerings that go beyond basic application forms for new customers.

The organisations in the survey currently offer only eight products with some element of online account servicing today. In a year’s time the number of products with on-line servicing will have more than quadrupled to 35.

Deloitte's Carr believes building societies should leverage their brand to gain market share over their main rivals. "One example is to offer a range of products, such as credit cards or personal insurance, with members or charities benefiting from fees earned, something that plc’s cannot match," he says. "As well as increasing membership, the main benefit is to increase products per member, a key factor in increasing retention.”