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The arrival of the Internet as a platform for mass communication
has brought to the consumer a huge amount of choice in available goods and services.
Services which provide information and other intangible goods such as banking, insurance
and share trading are exploiting the Internet to good effect.
Quite right too; as consumers are used to telephone banking, the logical step is to
conduct your financial affairs over the Internet. Benefits to the consumer include access
to real-time information regarding one's bank balance, stock markets, share portfolio and
sporting events (for the gamblers among us). Of course, the obvious benefit is seeing in
front of your eyes financial transactions over any given period. With these services being
a virtual entity (as opposed to bricks and mortar) the cost of entry being relatively low
(consultants KPMG estimate it takes only £6m to set up an online bank!) consumers should
benefit from very low charges and prices for financial products. This is happening.
Citibank ( www.citibank.co.uk
) offer real, telephone and Internet banking.
The service is free, including free £500 overdraft facility, higher than normal interest
on your balance and also foreign currency accounts. I have used Citibank for 3 months and
found the service adequate enough. There are however one or two annoyances. Firstly, you
are given 3 PIN numbers to remember (one for the 'real' Citibank card, one for telephone
access and one for Internet access). I feel this is taking security a little too far.
Secondly, when doing telephone banking, the service is automated voice, if you need to
speak to a real adviser well I have yet to speak to one, as I lost patience listening to
Vivaldi whilst on hold for 10 minutes. I resorted to another media channel a shirty
letter to Customer Services.
Online share trading is also fast becoming a killer application on the Internet.
Traditional brokers beware the commissions for online share trading are a fraction of
traditional City brokers. One such online broker is nothing-ventured.com owned by long
established City firm Durlacher. There is a yearly fee of £50 and in order to
trade there must be sufficient funds in your account. Once registered with
nothing-ventured, one has access to stock prices in real-time, as opposed to typically a
fifteen minutes time lag from other financial portals. Then it's simply a matter of
instructing nothing-ventured to buy or sell by clicking the appropriate button. They will
hold the shares for you in a nominee account and create your own share portfolio for you
to view online. This is a great service the portfolio can tell you how much it is worth
as a whole or by individual stock. You can also set up an alert when certain stock prices
are reached, so you know when to buy or sell! Fees for trading comprise of a fixed charge
of £11.50 plus 0.8% for orders up to £2500. Ideal for the small investor. Always bear
these two points in mind however: investments can go down as well as up, and only invest
what you can afford to lose! The stockmarket is a long-term investment I bought shares
in Pace Microtechnology three years ago at £1.17, they are now worth £11.30!
Jonathan Tedd is a consultant at RTSe |
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