Dublin company wins approval for UK launch

ENBA, the Dublin-based holding company set up to offer the first Internet-only banking services in Europe, has received approval to launch in the UK in the next six weeks after overcoming initial licensing issues.

It has received regulatory approval from the Banque de France to provide online financial services together with its joint venture partner, Banque d'Escompte. The nature of Banque d'Escompte's licence will authorise Enba's First-e and Factor-e online banking services to trade anywhere in Europe once the relevant central banks give clearance. Banque de France's approval should significantly ease this process.

Enba was initially interested in gaining regulatory approval from the Irish Central Bank. But it is understood that difficulties arose over the Central Bank authorising a public company to trade as a bank. It is believed there was a reluctance to become the first European central bank to authorise an Internet-only bank.

The company's first consumer banking service is now being piloted with trial customers and actual money through a password protected website. First-e is the new consumer service which will offer a full range of Internet banking services mainly to UK resident customers. Another service called Factor-e will provide Internet financial services and products to other businesses either on an own-branding or co-branding basis.

Both services are registered business entities in their own right and are authorised to operate under the auspices and banking licence of Banque d'Escompte, with technologies supplied by Enba.

The primary selling feature of Internet banking is the low cost to the consumer stemming from minimal operating costs. Enba plans to compete directly with online banking services in Britain like Egg and Lloyds TSB, and would hope to attract tens of thousands of customers this year. It's biggest challenge will be to gain trust among customers without the backing of a recognised local bank.

Enba already employs 64 people in Ireland and says it plans to take on a further 350 people here in the short term. They will be primarily employed in high end software development roles, while call centre activities are being outsourced to a company in Cork.

International investment group, Apax Partners, invested £10.4 million in Enba in March. It has also received backing from Intel and German retailer Metro.