Beyond the Internet

"There's none of this HTTP backslash stuff that you need to type if you're trying to look for something on the Internet," Seward says. "My mother could use this." And that's just the point. HSBC and a handful of other banks across Europe want to takeelectronic banking one step beyond the Internet, bringing their products to the mass market on a platform that won't intimidate people who don't crawl the Web.

In the UK, HSBC is getting a head start of at least a few months over rivals such as Abbey National Plc, which hopes to get its service onto the small screen some time next year, using the same BSkyB platform. Things are slightly more advanced on the continent. In France, Credit Agricole was first off the blocks with an interactive banking service launched last October through an alliance with digital-TV group TPS, or Television Par Satellite, and France Telecom SA. Stephanie Sonolet, head of new projects at Credit Agricole, says that around one-third of the bank's 220,000 customers with access to digital television have at least given TV banking a try. "It uses the same navigation as other interactive programs like the TV guide and home shopping," she says. "People aren't afraid to use it."

In Spain, meanwhile, Bancaria de Epana SA and BancoBilbao Vizcaya have begun offering some interactive services within the past few months. The big question now is whether the concept will work or just end up, like the Beta video platform in the 1980s, on the scrap heap of great ideas that didn't quite make it. HSBC's Seward says the bank spent two years surveying customers and adapting the service to what it thinks they want. Even so, he concedes that there are plenty of unknowns.

"There are an awful lot of large behavioural changes that are required," he says. "We're trying to turn couch potatoes into couch commandos." Still the bank has high hopes. Further down the line, it plans to use interactive TV to sell and promote more advanced products such as travel and accident insurance, savings accounts and even mortgages. The long-term strategy is more clear-cut: make customers so reliant on technology that they'll stop using local branches, allowing banks to cut some of the huge overhead in their retail networks and compete more effectively with new,low-cost entrants to the market.

Psychological shift

For Britain's traditionally stuffy banks, the changes now under way point to a fundamental shift in psychology, analysts say. This is, after all, a country where telephone banking was, until recently, considered a pretty cool idea. David Williams, a banking analyst at Morgan Stanley Dean Witter in London, says UK banks have simply had to move quickly - or risk getting left behind. "The rate of [technological] change is accelerating," he says. "Ideas that previously would have taken lots of time to filter through are now having to be accepted much more quickly."

According to HSBC, television banking is attractive because it's fast and easy to use. On top of that, customers with digital television will need only a telephone line to get started. But like others investing in the new platform, HSBC is still hedging its bets. The bank already offers online services in Britain and Brazil and plans to keep rolling out new offerings in its far-flungoperations, according to Alan Jebson, head of information technology at the bank. The ultimate goal, he says, is to connect all of the different systems around the world. "We are building this as if it's going to succeed," he says.

Banking with the king

HSBC's partnership with BSkyB in interactive TV, known as British Interactive Broadcasting, dates back to 1997 when Barclays turned down an opportunity to take part. As well as spending 60 million pounds ($95.4 million or 91 million euros) for a 20% shareholding in the project, HSBC has spent millions of pounds more on research and development to prepare for the launch. Other shareholders in the BIB project include BSkyB and British Telecommunications PLC, with 32.5% each, and Matsushita Electric Industrial Co. of Japan with 15%. As a shareholder, HSBC gets a head start of at least three months over rival banks that want to use the satellite platform. It intends to make the most of that edge.

Next week, HSBC will begin running a series ofadvertisements on BSkyB digital television to give its new service a dynamic image. Featuring a red sofa similar to the one in the demo room at HSBC headquarters, the ads show various people, including a young Elvis impersonator, flicking through channels and trying to decide which banking product they'd like to buy.