Lloyds TSB: going forth where others fear to tread

It's a brave decision by the UK bank, in the face of widespread pessimism in the eBanking sector. Lloyds has some advantages over dotcom failures such as First-e, including a better-recognized brand name and a more calculated roll-out strategy. But there's still no guarantee the venture will impress mainland European customers.

Lloyds TSB is rolling out its pan-European online banking division, evolvebank.com.

Scary times may be ahead for UK bank Lloyds TSB, after it announced its decision to rollout its European online banking division, evolvebank.com. The venture, which launched in Spain at the end of January, will be launched in Italy in early 2002 and then in France and Germany later in the year.

Earlier this year Lloyds abandoned plans to launch evolvebank as a standalone operation in the UK, instead choosing to enter into a joint venture with the country’s largest utility, Centrica, under the Goldfish brand name.

Lloyds hopes that evolvebank will give it a firm foothold in the European online banking arena. If all goes according to plan the bank will be expanded across continental Europe and will reach profitability within four years.

Considering the doom and gloom that currently surrounds dotcoms in general and online banks in particular, Lloyds’s decision to expand evolvebank seems brave. The collapse of Irish-based, French-registered First-e after it failed to build a sufficient customer base makes the decision seem all the more daring.

However, Lloyds may have more of a chance. For a start, it will expand the bank country by country rather than trying to launch across Europe simultaneously. It has chosen the Italian market well as there are few competitors already operating there and the market is forecast to grow rapidly.

Lloyds’ backing of evolvebank should also boost the public’s perception of the new online bank. When customers did not come running to First-e, it was thought to be partly because it was not attached to a traditional, well-established bank and consequently not a recognized brand. But on the other hand, it’s not clear how much clout the Lloyds TSB name will have with mainland European customers.

Only time will tell whether the aforementioned factors are sufficient to make evolvebank successful. Its success would be a welcome boost to a faltering sector. Its failure would be another nail in the sector’s already partially closed coffin.

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