The growth of the online banking sector has prompted Barclays to announce an investment of £35m over three years in its banking channels.

The move comes in the same month that online bank Egg announced that it expects to break even this year.

Barclays has teamed up with IBM to improve customer services through the integration of its banking channels. The project will see Barclays use IBM's WebSphere platform to build an ebusiness infrastructure and to further web-enable its services and channels.

The project will also involve the implementation of Tivoli system management software, and groupware technology from IBM's Lotus division.

Kevin Lloyd, chief technology officer at the bank, explained that Barclays decided not to create a standalone online bank, such as Abbey National's Cahoot, but instead opted for a multi-channel approach, offering services and account access through tools such as the telephone and the internet.

He said that Barclays would also develop a highly secure web banking system aimed at medium and large enterprises, which would also have links to the multi-channel system.

"The projects will allow customers and staff access to relevant, accurate and up-to-date information and data, regardless of the channel," said Lloyd.

Barclays' investment follows a prediction by research company Datamonitor that the number of users of internet bank accounts in Europe will treble over the next few years, jumping from 23 million at the end of 2000 to 75 million by 2005.

Financial companies already offering online services are optimistic about their prospects. Lloyd claimed that over two million customers are using the bank's existing internet banking facilities. Egg now has more than 1.7 million users and predicts it will break even within months.

Several other companies are also planning to launch online financial services. EasyGroup, the company behind airline EasyJet and internet cafe chain EasyEverything, announced the launch of Easy-Money last week.

In association with credit card company Accucard and direct lender London Scottish Bank, EasyMoney will offer online credit cards to consumers from September.

The cards can be obtained from the EasyMoney website, where users can select from a choice of interest rates, cash-back rewards and annual fees.