18.6 million Europeans visited an online bank or building society site during October 2002, a rise of three million people in six months, according to figures released by Nielsen/NetRatings.

Usage of online banking is far from consistent across European markets though, with the Netherlands and Sweden leading the way in online banking penetration and some of Europe’s larger markets lagging behind. In the Netherlands, 97% of visitors to financial Web sites use an online bank. In Germany, this figure is only 60%.

In the UK, almost five million people managed their finances online in October 2002 at home, and just over seven million from both home and work. Unlike the other European markets where established offline brands dominate, Britain’s favourite online bank is the Internet-only brand egg.com, which attracted over 1.5 million people in October 2002. Traditional high street brands Lloyds, Barclays, HSBC and NatWest make up the top five retail banking sites.

"Even though the online banking market is growing in Europe, these figures suggest there is still plenty of room for expansion in some markets,” says Tom Ewing, Internet Analyst. "Some of Europe’s biggest offline banking markets, including Germany and the UK, still have potential for further development compared to the Netherlands and Sweden. The key may be converting existing users of financial websites to other online financial offers."

The figures tally with a recent report by Celent which compares online banking penetration in the mature Nordic markets with US figures, and predicts that if US retail bankers apply best practices, Internet banking adoption will rise from 22% in 2002 to 38% by 2010.

"Two best practices jump out," says Alenka Grealish, Celent retail banking analyst. "First, banks successful at generating activation have made bill pay the centerpiece of their online banking offering—not an add-on service. Second, banks successful at tapping the mainstream are focusing significant resources on educating and galvanizing their branch staff. For newcomers to online banking, encouragement and explanation by a branch staff has proven to tip the scales from awareness to action."