Enba, the Dublin-based holding company for Internet banking products, faces the challenge of attracting significant numbers of consumers to bank online, following this week's #2.4 billion merger announcement of its First-E product with Uno-E, the online banking arm of BBVA (Banco Bilbao Vizcaya Argentaria).
This week one industry analyst warned there is still little evidence to indicate the online medium can be used to acquire new banking customers.
According to Mr Michael Hennigan, founder of finfacts.com: "Europe's leading Internet bank MeritaNordbanken has 1.1 million Internet customers, but has not been rewarded on the stock market because it is only bringing existing customers online rather than winning new ones."
However, Enba chief executive Mr Gerhard Huber - whose stake in Enba is now estimated to be worth around #64 million - says this is not borne out in the First-E case where every customer is a brand-new customer.
"We are recording between 300 and 600 new accounts each day, so clearly a significant proportion of the population is happy to move away from traditional banking," Mr Huber says.
Enba began offering its first retail banking product last November when it launched First-E, a deposit banking service. It currently has 110,000 registered users, of which 50,000 are customers, with an average deposit of around #17,500.
Mr Huber understands the newly merged entity - which will operate as Unofirst - needs a minimal level of physical interaction with its customers. Enba has already been involved in two bids for premium retail premises in the London area.
"We plan to have a number of `consumer touchpoints' which will not conduct traditional banking functions, but where people can get information about our services, and existing customers can lodge queries or complaints."
It is likely three of these centres will be opened in London, and later in Manchester and Birmingham. In Germany offices are expected to be opened in Munich, Frankfurt, Berlin and Dusseldorf.
Mr Hennigan this week also raised questions about the ability of online banks to cross-sell products. "For example, in the UK it is estimated that less than 50 per cent of the customers of Barclays Stockbrokers are also banking customers."
However, Mr Huber is convinced the commitment by online depositors with First-E already indicates their interest in other services.
"We are targeting the one-stop-shop Internet user, and pushing financial services into this area through Enba's other products, including comparative pricing services. If I can convince 50 per cent of depositors to use us for upcoming current account services then that customer relationship becomes much more profitable."
To achieve global penetration Unofirst must now embark on a tour of the relevant central banks in each market to attain regulatory approval to trade. Following this week's merger, Enba will terminate its current agreement with Banque D'Escompte of France, which had originally provided its online trading licence. Now it has proven itself as a legitimate financial broker, Enba is confident it will be allowed to trade online in its chosen markets using its newly-acquired licences.
Mr Huber hopes most European banking approval can be completed by July.
