Halifax has indefinitely postponed the launch of its net bank, IF.
It has been a summer of discontent for Halifax and its Internet bank, IF. The company announced yesterday that it was postponing the launch of the Internet bank indefinitely due to fears over excess demand crashing the system. The bank will instead launch as a telephone banking-only operation from today.
The bank has in the last few months suffered two other launch delays, citing technical problems as the cause. The delay adds another £2 million to its budgeted start-up costs of £90 million this year, and will affect their target of 500,000 customers by the end of its first year in operation.
The indefinite delay will affect already fragile customer confidence in UK Internet banks. The technical problems suffered by Cahoot and Egg are making it difficult to encourage traditional bank clients to move to the online banks, despite the more favorable interest rates and benefits offered. Customers will be more inclined to use the online services offered by traditional banks such as NatWest, Lloyds TSB, Barclays, and HSBC, seeing their services as more reliable and having the security of a branch network if problems arise.
IF is falling behind in the Internet banking race. Despite the large product range it is offering, and the favorable rates it will provide to customers, failure to launch the site on three occasions has badly damaged customer confidence. Its position is recoverable, but its actions to date have been far from intelligent.
