|
U.K. insurer has golden Egg
|
 |
April 27, 1999: 8:32 a.m. ET
Prudential's banking arm signs 500,000 users, tightens rules for new customers
|
LONDON (CNNfn) - Egg, the online banking unit of the U.K.'s largest insurer, Prudential Corp., has cracked the Internet financial services market even faster than its pioneers dared to dream.
Just six months after its launch last October, the telephone-and-Internet banking operation has grown so rapidly that Prudential has decided to switch to an Internet-only application process, the company said Tuesday.
The move to purely Web-based sign-up is likely to dampen short-term growth in the pioneering unit in the short-term.
But Prudential officials said they had little choice after the new service was flooded with 500,000 customers since its launch, bringing the total value of savings deposits to a whopping 5 billion pounds ($8.07 billion). Prudential initially set a five-year timetable to reach those targets.
"Our latest figures from Egg demonstrate that the e-commerce revolution in financial services is already here," Prudential CEO Peter Davis said Tuesday.
Davis estimated that around 30 percent of Egg's half-million customers already have Internet access. He noted that Internet growth in general is running at a rate of about 11,000 in the U.K. daily.
"Our initiatives to encourage more and more people online will serve to enhance still further Egg's position in the fast-growing e-commerce market."
EGG CEO Mike Harris told Reuters Egg's astronomical growth curve had forced his hand. To handle the surge in applications, Prudential had to set up another costly telephone call center or restrict access to the Web service.
He opted for the latter.
"We've already built a critical mass for telephone customers very quickly," Harris said. "The evidence that we've seen on our Internet site shows that we can grow the business quickly by restricting future customer access to Internet access."
Egg already has linked up with U.S. software giant Microsoft (MSFT), Britain's Affinity Internet Holdings, and Fujitsu to offer a full package of Internet services. These include free Internet access and e-mail, and complementary information services.
Harris said the Egg unit, within a year, will allow customers to apply for mortgage and personal loans online. He also said Prudential intends to enhance the site with a range of investment products. Prudential already offers personal and group pension plans, investment bonds, and life, home, and car insurance.
Egg said it will move to "phase two" of its business plan Wednesday.
Under the new application plan, once new customers have signed up for an Egg account, they'll be able to service the account online, by telephone, or by mail.
Prudential's move to clamp down on telephone access was motivated primarily by bottom-line considerations, said one London-based analyst, who wished to remain unidentified.
"They've taken enough business through their banking unit, they're losing a lot of money on it at the moment," the analyst said. "At the same time, they want to start putting a cap on their current exposure."
The success of Egg comes against a backdrop of heightening pressures on Britain's traditional mortgage and loan societies.
In recent months, Halifax, the largest home mortgage lender in Britain converted from mutual to stock ownership and beefed up its product offerings to include retail banking services along with consumer credit and savings products.
On Monday, members of Bradford & Bingley, a large U.K. mutual society, voted against the company's board, and in favor of converting into a full-fledged bank. 
-- from staff and wire reports
|
|
|
|
|
|
Prudential Corp. PLC
|
Note: Pages will open in a new browser window
External sites are not endorsed by CNNmoney
|
|
|
|
 |
|
