Internet banking is set to grow steadily in Western Europe over the next five years, with the number of online accounts increasing by a compound annual growth rate (CAGR) of 11% from nearly 100 million in 2003 to more than 150 million in 2007, according to forecasts from IDC.
The IDC analysis focuses on six Western European countries and predicts that the UK and Germany will continue to top the table with the most Internet accounts, while France, Italy and Spain will gradually increase their share as banks in these countries begin to offer multi-channel services.
But despite the overall increase, the study also predicts a slight slowdown in Web banking in Sweden and Germany in 2006 and 2007, due to the rising saturation in these markets.
Mirko Corbetta, research analyst at IDC's European vertical market expertise centre, says one of the priorities of the Western European banking sector is to gradually migrate existing traditional bank accounts on to the Web.
"Banks are forced to adopt a multichannel strategy that requires a rising level of integration among the different channels," he says.
The main driving factor for net banking is cost reduction, says IDC, with online transaction costs significantly lower for both banks and customers compared to traditional branch activity.