So says Intelligent Environments (iE) following independent bench tests of its NetFinance Encore credit card system by the Microsoft Technology Centre. The tests measured the maximum number of online applications that could be handled by NetFinance Encore running on a standard quad-processor server, retailing at around 2,500 for the basic hardware and costing around 10,000 fully loaded with operating systems and database software.

NetFinance Encore was clocked at nearly 40,000 applications per hour, sufficient to process the expected 44 million new online applications for credit cards over the next two years in the space of about six weeks.

While iE acknowledges that few issuers would require this theoretical degree of power, it also believes that they can't afford to underestimate the increasing prominence of the Internet as a direct channel to market. One major UK bank has already taken note, receiving 50% of all applications for one of its key credit card brands via the Internet.

iE argues that financial services providers need to set their sights on performance capabilities to ensure that they can easily cope with increasing demand and the inevitable expansion of online services, but this shouldn't lead to an IT budget of millions.

Mike Warriner, Chief Technology Officer at iE, said: "The continuing growth of the Internet means that providers need to get their online systems performance and IT infrastructure right now, so they have an Internet platform that can perform in the future. The problem is that most systems in use today are over-engineered and too costly. We know of significant online projects from household names that have been cancelled simply because the hardware costs were not viable."

In the Microsoft Technology Centre tests, NetFinance Encore running on an industry standard, commodity quad-processor server was able to process 11 applications per second or 39,600 per hour with 5300 concurrent users.

Warriner continued: "Well written software outperforms badly written code by a factor of 10 or more. Combine that with the six-fold increase in hardware processing speeds over the past four years and you can harness enormous potential power without spending millions on hardware and maintenance costs. This enables the provider to start worrying about whether the service offers enough business sophistication and stop worrying about whether its going to break the system and the bank."

iE also credits the power and productivity of the Microsoft .NET development environment as a key factor in NetFinance Encores performance.

Mark Quirk, Head of Technology in the Microsoft Developer and Platform Group, said: "With NetFinance, iE has done a great job delivering on .NETs promises of highly secure, scalable and manageable applications, utilising both their technical and domains expertise to deliver a compelling business application."

Recent research suggests that around half of all subscriptions to retail financial services are now completed via the Internet. In the UK alone, three million people are expected to buy financial products online in 2004, an increase of more than 30% on last year. (Source: NOP World Financial March 2004).