Internet banking has failed to deliver as a tool to gain a competitive-edge, according to PricewaterhouseCoopers` (PwC`s) latest annual banking survey.
The survey, which contains the views of executives of 32 domestic and foreign banks operating in SA, says that Internet banking has gained in popularity, with about 582 000 clients signing up last year.
The total number of banking clients using the Internet grew to just more than a million, and this is expected to double by 2005.
However, it says that contrary to expectations, bankers feel that Internet banking has failed to deliver as a tool to gain a competitive-edge.
"When one looks back a year and two years, the guys were saying that the Internet is the thing of the future and they expected it to deliver the goods," says Tom Winterboer, PwC`s lead banking partner.
"I think what the banks are saying to us is they`ve now got the Internet in and you`ve got to have the Internet to be able to play the game. In terms of being competitive, the big four compete among the big four and everyone`s got it, but it`s really not delivering what they hoped it would."
The survey found that bankers recognise IT as a major driver for growth in the future, even though spending on technology declined compared with previous year`s technology budgets.
"We did say that the spend on the IT side was going to be a lot less than guys have said to us in previous years, so it would appear that they are cutting down on that," says Winterboer. "When you look at the survey we did for the year 2000, guys were looking at quite large amounts that they were thinking of spending and that is now tailing off and they are going to spend quite less."
He adds that while the bankers did not explain the reasons, he believes the decline in spending on the Internet is one of the main causes.
"In the millennium year, guys were expecting a lot of expenses and I think the Internet obviously has had a lot to do with it, but when they look at the experiences in Europe and elsewhere, the Internet hasn`t delivered what they thought it would, and I think they`ve cut down on that basis."
However, the survey indicates that bankers still believe that wireless technology will change the face of banking radically by 2005.
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