Banks and financial businesses still lack innovation on the web

The internet banking pioneer Jim Spowart says that 10 years after the arrival of internet banking, the UK’s bank and financial companies lack a clear vision of where to go next.

This week the tenth anniversary has been a hailed as a milestone for internet banking in the UK. But Mr Spowart, the chairman of Peopleschampion.com, who created the UK’s first bespoke internet bank which used offsetting of mortgages against current accounts, says there has been precious little innovation in the use of the web over the past decade.

“The banks have been concentrating on profitability. All they have done is use the technology to update their traditional banking methods. There’s been very little thinking about how they can offer the customer something brand new. Internet banking is just an add-on convenience for many – but it hasn’t changed banking. That’s why the banks are having to hit the customers with extra hidden charges.”

“In every way, the internet has changed the way we all look for products and services. The poor old traditional bankers are still scratching their heads looking for ways of gaining customers, yet the whole game has changed. For example, indiscriminate mail shots to thousands of customers are a waste of time – today it is about giving the customer choice and guiding them to the best deal."

Jim Spowart now believes the biggest change has been the arrival of aggregators and price comparison such as Peopleschampion.com. He feels this arena will become more sophisticated and more sharply focused. But he says maintaining customer confidence about the security of financial information and transactions is paramount.

“The market is all about offering consistently good value for consumers – and now there is no place to hide for the poor performers who once relied on customer inertia,” he added.