The Co-op's Internet bank, Smile, is the first of the online bank to guarantee services, with an offer to pay out automatic compensation to customers who are let down.

The move came as the Banking Ombudsman watchdog said that it would consider ordering that compensation be paid to users of Internet banks who had been inconvenienced by technical hitches.

This view was not shared by the Banking Ombudsman, who said that customers should not be content with suggestions that only financial loss warranted compensation.

A spokesman for Smile took the opportunity to gloat when he spoke to The Express. "We understand the levels of service customers expect," he said. "We have not had any of the serious problems of many of our rivals."

Next month, Halifax plans to launch its online presence, Intelligent Finance. The ex-building society can be certain that it will be closely watched.®

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