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Swiss Lead Way in European Online Banking

[London, ENGLAND] Swiss banks Credit Suisse and UBS are leading the pack in Europe's online retail banking industry, Forrester Research said Wednesday.

Close behind the Swiss are the French, with Banque Directe and BNP Paribas respectively running third and fourth. Behind them come the Finns with one bank and the Germans with four banks in the top ten. From the U.K., only Barclays -- sharing sixth place -- is rated as having one of the better online services in Europe.

Brian Gross, analyst at Forrester's European headquarters in Amsterdam, commented that the Swiss came top because of what he identified as their "comprehensive, integrated offerings."

"Consistently integrating a gamut of products and services with useful tools like portfolio analyzers, these sites come closest to what it will take to win the battle for customers in Europe's online banking war," said Gross.

According to Forrester, many European banks will struggle against competition with portals, brokerages, and insurers -- many of which are starting offer services to meet all their customers' financial needs.

However, some of the most sophisticated offerings from European banks have yet to arrive, and could not therefore have been included in the Forrester assessment. For example, HSBC customers will have access to the new online investment service from Merrill Lynch HSBC, a billion dollar venture aimed at the self-directed investor.

Forrester says that European banks will need to offer "Personal Finance Management" to their customers, including sites that are rich in content and have powerful financial planning tools.

"Most banks are proud that they have brought payments and statements to the Internet, but this is no time for them to sit back and bask in their achievements," said Gross.

He added that Internet banking is now reaching mainstream customers -- the very people who are being targeted by spin-off banks from insurers, brokers, and financial media.

It is, as Gross said, a cutthroat business that is nothing less than a war for survival. He warned that although the top 25 banks in Europe are each pouring hundreds of millions of euros into e-commerce, not all of them will convert their offline strength into online strength.

The way forward, according to Forrester, is "holistic financial planning" services that include such features as account aggregation, online advice, and a product selection from an array of suppliers.

To summarize, Forrester's Top Ten European Online Retail Banks are:

1. Credit Suisse (Switzerland)
2. UBS (Switzerland)
3. Banque Directe (France)
4. BNP Paribas (France)
5. Merita Bank (Finland)
6. Barclays (U.K.)
6. Advance Bank (Germany)
6. Commerzbank (Germany)
6. Deutsche Bank (Germany)
10. Direkt Anlage Bank (Germany)
10. Banca 121 (Italy)