Halifax, the consumer banking arm of Bank of Scotland, yesterday took its battle for Irish customers online with the launch of an internet banking service. According to James Moore, head of e-commerce with Halifax, its research found customers would only switch current accounts to a bank that offered an online facility.

Halifax claims that its service is unique in the Irish market. It claims that applying for a current account online, receiving an e-mail confirmation that new payments or direct debits have been set up, and the ability to change statement frequency as well as the facility to change the contact details associated with the account are unique.

A spokeswoman for Bank of Ireland declined to compare services, but stressed it is committed to providing "multi-channel" access to its services.

"Our online banking facility continues to maintain a world-class customer satisfaction level of 90 per cent and our 600,000 registered customers have conducted over six million transactions in the past year," she said.

AIB's head of e-channel development, Sean Jevens, pointed out that it offers a number of facilities that Halifax does not, such as international payments, a secure messaging system and the ability to have a share dealing account.

He also said the number of users of its online service has grown 28 per cent in the last year, while transaction volume has gone up 40 per cent.

While the ability to do more online will clearly appeal to customers, particularly of a bank that is still building out its branch network, it has to be balanced with security considerations. The phenomena of "phishing", whereby scammers send spoof e-mails to try to get users' log-on details, is now common in Ireland.

In response just over a year ago, AIB introduced a code card, which is a list of 100 unique four-digit codes. "Customers are required to enter a code each time they want to use a feature which has an extra level of risk - like adding a beneficiary or making an international payment," says Mr Jevens. "The fact that Halifax are not using another factor of security seems a bit bizarre - as a consumer, I would be concerned."

Mr Moore is confident that Halifax have the necessary additional steps in place to protect its customers.

"With e-mail confirmation and the additional security question required to complete each transaction, we are very confident of the security of this model," says Mr Moore. "We consult regularly with our colleagues in the HBOS group on any new threats that are emerging on the internet."