AOL Europe and BSCH have formed an online banking alliance.
It looks like BSCH has taken the view that low levels of PC ownership is a significant hindrance to the development of eBanking in Spain. As a result it will offer its eBanking services through an Internet access device that costs a fraction of what a PC would cost.
Unfortunately, BSCH’s strategic reasoning may be slightly flawed. 43% of all households had PCs in Spain – a considerably higher penetration than in other European countries with similarly developed Internet markets. In actual fact, the main hindrance to eBanking in Spain is not the number of PCs, but low household Internet connectivity. It is the lowest in Europe, estimated at 18%. This low penetration has been caused primarily by a lack of technological focus in Spanish society, the slow uptake of technology by business, and the high cost of access relative to the country’s low level of disposable income.
However, Internet accessibility is forecast to increase. There is now a high level of competition both within the fully deregulated Spanish telecoms industry and, more specifically, between ISPs. This has increased the profile of the Internet and also led to considerable reductions in access costs, particularly pushed by the widespread launch during 1999 of free services. These changes are forecast to increase Internet penetration to 26% by 2001.
But BSCH is not so silly in its thinking about PCs. Many PCs currently in peoples’ houses are not powerful enough to run Internet services, so the low cost devices may be useful to those people who want to have Internet access but do not want spend the money on upgrading their PC. For those people, low cost access devices may be just the thing to get them connected.
