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Monday, 10 January, 2000, 14:43 GMT
Internet 'to transform finance'

generic e-commerce graphic

Most financial organisations believe that e-commerce is set to radically alter the way business is done, according to a survey.

The Confederation of British Industry and PricewaterhouseCoopers survey showed that 94% of banking respondents believe e-business heralds a major change to their environment.

More than two thirds think the leaders of tomorrow will be specialists in e-business.

However, all sectors cited a lack of understanding as a barrier to developing an internet presence which left many unsure as to what approach to take and who to turn to for expertise.

This means that while 89% of companies have who participated in the survey have an e-commerce strategy, less than 50% knew what proportion of their usual customers were online.

Experiences shape attitude

Despite the fact that the importance of the internet in business life is widely accepted, the survey shows wide variations in responses between different parts of the financial services industry.

The sectors anticipating the most dramatic re-shaping are banking and life insurance, with a large majority expecting their industries to be revolutionised.

At the other end of the scale, only 8% of insurance brokers believe that e-business will significantly alter their environment.

A PwC spokeswoman said:" It is the sectors that are already feeling the heat of e-business competition which have responded first and, more significantly, realised its significance and potential."

The survey found that two thirds of respondents expected up to 20% of new entrants to their business in the next year to come via the internet.

Many new entrants to the financial services sector are existing institutions who have taken advantage of the internet as a low-cost distribution channel.

"Using a modern e-commerce brand as a battering ram they have knocked down the main barrier to entry," the survey concludes.

Jobs outlook upbeat

The news comes as research points to business confidence continuing to grow in the financial sector.

This should mean a boost for jobs with the biggest growth set to come from banks and fund management companies.

The upbeat outlook emerged in the Confederation of British Industry's financial services survey which found 45% of finance firms expect to increase jobs in the first three months of the year, while just 9% expect to cut staff numbers.

The positive balance of 36% contrasts with a poor job prospects in the previous quarter of 1999 when the balance was minus 14%.

Confidence grew with a positive balance of 21% of firms saying they were more optimistic.

The rise in confidence was not as strong as in the second quarter, but was well up on the same period in 1998 when the optimism balance was at minus 27%.

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See also:
01 Nov 99 |  The Economy
Bosses told 'get online or get out'
29 Nov 99 |  Business
E-business: opportunity or peril?
13 Jul 99 |  The Company File
Big business tangled in Web

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