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Despite an increasing number of dotcom failures, I have been enc ouraged to see solid evid ence in the last few weeks that the use of online financial services is still in the ascendancy.

While there has been a down turn in demand for dotcom services involving tangible goods, intangible products such as financial services remain highly suited to this medium. With Government eff orts to regulate financial pro ducts via Catmarking, this is a trend that can only continue.

A UK directory of financial services websites, Find, has just published its user statistics for the fourth quarter of last year together with comparative information for 1999. They identify some significant trends in the marketplace and make compelling reading for anyone involved in distributing financial services products.

For the benefit of anyone who does not already know it, is a website containing over 5,000 links to sites covering every conceivable area of financial products. These are sub-divided into various specialist areas, so a consumer wanting to find life ins urance advice on the internet can go to the life insurance pages and view a list of organisations offering information on life policies over the web.

Over the last three months, consumers clicked through to over 500,000 financial websites using this service. The last year has seen com moditised general insurance products supplant personal loans and credit cards as the most popular area within the Find service. Travel, motor and household insurance saw increases of 466, 451 and 316 per cent in the numbers of users clicking through to websites covering these areas.

I believe this is very clear evidence that consumers are increasingly prepared to use the internet for their financial shopping.

This strong growth is further supported by a study of consumer preferences for buying financial products carried out by Prodata for BT. The survey identified the internet as the most frequen tly identified pre ferred method of obtaining adv ice on motor and household insurance. Around 42 per cent of respondents said they would use the web as one of the sour ces for obtaining advice in these areas, clos ely beating face-to-face advice from a pro vider (40.9 per cent) and face-to-face advice from a broker (40.4 per cent).

Clearly, this survey allowed for people using more than one method to obtain information.

Although such statistics may seem to have little relevance to the life and pension sector, an essential element of using more online services is gaining confidence in the environment. These surveys are a clear indication that increasing numbers of consumers are prepared to shop for financial pro ducts online. This in turn strongly suggests that it is more a matter of when, rather than if, those financial consumers will be prepared to buy investment products online.

Only slightly less dramatic has been the increase in the number of click throughs to IFAs and other intermediaries via Find over the same period. In total, the number of connections to IFAs and discount brokers/fund supermarkets has inc rea sed by 293 per cent.

The actual split between these two categories was surprisingly equal, with 54 per cent linking to a full service adviser and 46 per cent opting for discou
nted or supermarket options. This even split is one of the things I find most encouraging. It shows that the internet is providing opportunities for all areas of the financial services community.

Further evidence of the increased use of the internet to obtain life and pension advice is provided by the increases of 117 and 149 per cent respectively in click throughs to these areas.

To reassure those in the traditional advice market, the BT research makes clear that, even with new chan nels emerging in the life, pension and mort gage markets, there is still a strong preference for face-to-face advice. Life, pension and mortgage advice in person from the pro vider scored approval ratings around 60 per cent, with face-to-face advice from an IFA scoring only slightly lower.

Interestingly, IFAs scored str on gly as a pot en tial source of adv ice on credit cards, savings accounts and current accounts, achieving preferral rates of over 40 per cent in each of the categories, despite them not being traditionally associated with the IFA sector.

When it comes to actually buying products, there is a very clear preference for products from recognised high-street financial institutions. IFAs were well down in second place but still a very long way ahead of non-high-street financial institutions and non-traditional financial brands such as Virgin, which barely scraped a 10 per cent share in the key product areas.

This sends a worrying message to life offices which have not maintained a high-street presence, particularly when we seem to be entering a non-polarised world where banks could again seek to reclaim the moral high ground in financial product sales.

If, like me, you believe that the future of financial services lies in bringing together the best of the old and new econo mies to create a lower-cost environment for consumers, you cannot help but be enc ouraged by reading these various research summaries.

As every day goes by, I bec ome more convinced that our industry&#39s future will be based on advice delivered over a wide range of channels, including video or internet conferencing involving call centre-based advisers and a range of self-diagnostic automated advice services.

The means are at hand to write more business at lower cost to protect more people and, on this evidence, that seems to be exactly what the public want.

Looks like everybody wins, except those who want to stick to their quill pens.

A full copy of the BT research can be obtained from My detailed analysis of the Find statistics can be found at www.financialtech


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