Eighty-nine per cent of the 998 consumers surveyed by TCA Consulting had never used an online financial service. Not surprisingly, sixty-one per cent of respondents prefer to physically visit their branch on a monthly basis to check on their financial position - rather than use the Internet.

Banking customers' primary concern about the internet continues to centre around security issues. Forty-three per cent of respondents do not trust current levels of security on banks' Web sites, and only seven per cent believe that the benefits of online financial services outweigh the level of risk.

Overall, when asked what would most improve their banking experience, fifty-one per cent of respondents cite faster service. This demand for efficiency relates first and foremost to the branch network. However, it is mirrored by those customers considering making the cross-over to the Internet: thirty-nine per cent of consumers say they would consider using the Web to monitor their finances if speed and efficiency were improved.

Mark Jenkinson, managing consultant at TCA Consulting's retail financial services practice comments: "Banks need to urgently re-assess how they direct their investment in online financial services. It would appear that gaining substantial return on the significant outlay involved in setting up online financial services continues to be, at best, challenging."

Rather than spending large sums on launching services via channels such as WAP, PDA or digital TV, which will attract relatively few new customers, banks should focus on improving their existing IT infrastructures, advises Jenkinson.

"This will allow them to provide better customer service now and make them ready to support new channels once the technology develops to make them both effective and more widely used," he says.

The survey results indicate that the potential of the Internet for cross-selling remains limited at present. Only six per cent would feel comfortable purchasing and monitoring their financial products online, compared to the thirty-nine per cent who would purchase at a branch and then use the internet as an information seeking tool. Almost two-thirds (sixty-four per cent) of those surveyed claim that they would not use automated investment advice tools on the Web.

Banks may take small comfort from the finding that fifty-six per cent of consumers do not feel comfortable using banking services from brand names such as Tesco or Vodafone - and only twenty-nine per cent actively express confidence in these new financial service providers.