Egg makes online commitment

Egg - the branch-less banking and insurance arm of the Prudential - has announced plans to use the Internet as the main way it will deal with customers in the future.

Just six months since its October launch, the company - which offers high-interest savings accounts and other financial products - said it has already reached its five-year growth targets. It has 500,000 customers and has taken £5bn in savings.

Success has so far depended on a state-of-the-art call centre in Derby, and the company admits concentrating on the Internet will likely slow growth, even though 30 per cent of Egg customers are online.

But Mike Harris, Egg chief executive, said the company was faced with a choice: it could build another expensive call centre, satisfying current demand, or invest in ecommerce applications. He said ecommerce is the right choice in the long-term, even though it will probably cause a drop in the rate at which new accounts are opened in the short-term.

An Egg spokeswoman said: "We firmly believe the future of financial services is online, but we didn't want to invest in more call centres only to have to close them down in a few years."

She added that the company's revised goal is to have two million Internet customers five years from now.

Internet-only applications will include a range of investment products, unit trusts and probably a current account. A month ago, Egg joined the rush to offer free Internet access services, teaming up with Affinity Internet, Microsoft, and Fujitsu, which offered cheap PCs through the www.egg.com Web site.