Report on the internet economy In focus: the financial sector II. 2005 (Summary for the press)

2005. 11. 19.

The number of internet banking customers continues to rise rapidly

In association with Sun Microsystems Hungary, GKIeNET Ltd. and T-Mobile Telecommunications Co. conduct quarterly surveys on corporate internet usage and the development of the electronic economy in Hungary. The present report outlines the financial sector’s position in the internet economy.

I. Summary

The GKIeNET – T-Mobile e-Finance Index, which represents  the internet-related anticipations of financial institutions, was at 10.1 on a scale between –100 and +100 in the second quarter of 2005, reflecting a mild optimism as usual in the sector.

At June 30, 2005, the number of customers with internet banking accounts at domestic credit institutions was 604 thousand in the household segment and 96 thousand in the corporate sector.

The number of individual and corporate internet banking customers increased by 53% and 58%, respectively, over the past year.

Online transfer will continue to be the fastest growing transaction type.

II. Survey findings

The GKIeNET – T-Mobile e-Finance Index, the internet usage indicator of financial service providers reflecting the internet-related expectations of banks and insurance companies, continued to decline to 10.1 in the second quarter of 2005. The drop from the previous quarter can be attributed to the weaker expectations of insurance companies across the board, while banks have generally become more optimistic. This is particularly surprising given that the online insurance market (the mandatory insurance market) is slated to become more vigorous over October and November, and online transactions are popular in this area, due to significant discounts and to the high rate of standardized products.

Internet banking customers

At June 30, 2005, credit institutions offering internet checking account services had 604 thousand individual customers with internet banking agreements, up 11% from the previous quarter and up 53% year-on-year. The number of individual online customers is expected to rise to 700 thousand by the end of the year.

The number of corporate internet banking customers was 96 thousand at the same time, reflecting an increase of 10% over the previous three months and a growth of 58% year-on-year. The number of online banking customers in the corporate segment is expected to exceed 105 thousand by the end of the year.

Number of individual internet banking customers

Online services

Banks predict that online transfers will continue to be the fastest growing internet banking services in the household and corporate segments alike. Account inquiries and mobile phone top-up transactions are ranking number two and number three, respectively. The responding credit institutions predict growth in other areas as well, including equity sales and trading, credit applications, as well as other investment products and direct debits.

Expected changes in individual online banking transactions over the next twelve months as projected by banks

– balances , Q2 2005

III. About the survey

The survey was conducted over the period of September and October 2005, by means of questionnaires targeting credit institutions to collect information about their positions in the second quarter of 2005 and about  their future expectations. Banks were represented at 57% in terms of total assets.