German Banks Storm the WebFRANKFURT - Germany's financial services industry is storming the Web to profit from the rush of new Internet users whose numbers have doubled in the last few months to almost 16 million.
In February T-Online (see p. 8), the Internet subsidiary of German telephone giant Deutsche Telekom, concluded a strategic alliance with Comdirect, a daughter of Commerzbank, one of Germany's leading banks.
The alliance was sealed with a monetary arrangement that will give T-Online International a 25 percent share in the Comdirect Bank while Commerzbank takes an equivalent stake in the German Internet company.
T-Online's Web portal will use Comdirect's financial information content and set up a special platform for online stock purchases. Nor will Comdirect stop in Germany but push cross-border financial services, still relatively virgin territory in Europe.
Comdirect is profitable and has the resources to expand abroad. It is already represented in France and plans to move into the UK and Italy next. Online banking in Austria and Switzerland will be managed from Germany for the time being.
Germany's online banking and stock markets are tempting. Some 10 million bank accounts are online and two million stock owners manage their assets through the Web.
Dresdner Bank, another major financial institution, also has announced plans to enter the online banking business. It has already put several hundred million Deutschmarks into technological innovation and plans to invest another billion in the near future.
Deutsche Bank, Germany's largest, has even more ambitious plans for moving business online. "The Internet will revolutionize banking," CEO Rolf Breuer told a press conference here last month.
Breuer said his bank planned to invest 1 billion euros (about $1 billion) every year from here out in developing its "global e-strategy." In the current business year the bank will spend 300 million euros on "concrete projects" he did not identify.
The CEO plans to finance online investment through large scale sale of the bank's industrial holdings. He put the value of those holdings in companies like Daimler-Chrysler and the Allianz insurance company at 22 billion euros.
Breuer also announced strategic alliances with software giant SAP and with AOL Europe. SAP will help the bank build new marketplaces online that should have sales of 60 billion euros in 2002.
AOL Europe will help the bank "create a powerful platform to extend the bank's brokerage and online banking products to the Internet as well as to the mobile world," an AOL Europe statement said.