Internet investor: The year of the Net

Robin Amlot
Saturday 26 December 1998 00:02 GMT
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SO WERE you dreaming of an Internet Christmas? The hype from the United States claims more spending on Christmas presents this festive season by Americans over the Internet than across shop counters. That I find difficult to believe. But believe this: 1998 has been the year that the Internet came of age.

In January, the first ever online mortgage offer was launched by the broker, Paragon Mortgages. Internet Insurance policies became commonplace, with more than a dozen sites offering travel insurance policies and a handful providing motor and household insurance.

Electronic banking has taken off after much hype over the past 12 months. Barclays Bank has an off-Web operation, its own PC banking intranet, while the UK pioneer of Web-based banking, the Nationwide Building Society, offered itself as an Internet service provider as well.

Royal Bank of Scotland, Citibank, Co-operative Bank, the Prudential, Norwich & Peterborough Building Society and Lloyds all made significant moves on the Net. The net result of all this activity, if you like, is that around half a million of us now use the Internet or an intranet to manage our money.

Investing in shares via the Internet lags - at least in the UK, where our savings culture is not so directly focused on the equity market as in the US. There, stockbroker Charles Schwab says its Internet dealings hit a record of 121,000 trades in a day in November. In the UK, take- up has not been as swift, partly because the supposed benefits of Web trading - significantly lower costs - have yet to be passed on to individual customers. Nevertheless, a significant development of direct electronic trading occurred when Charles Schwab completed the first deal with a fully automated Web trade going through at 9.11am on 14 December.

The new "straight through" system allows individual investors to buy and sell shares via direct computer links. Previously, all Web-based broking services were really just glorified e-mail offerings. In future, individual investors will be able to execute buy-and-sell orders at "best price" and place their own limit orders.

Robin Amlot can be reached at RobinAmlot@aol.com

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