The downturn in the global economy does not necessarily spell gloom for suppliers of online training. Although the corporate world has had to tighten its belt, financial institutions still need to train sales staff in new products and to deal with a fast-changing regulatory environment. So, while they cannot afford to shut down their training programmes, many are looking around for cheaper solutions.

This is where e-learning comes in. The cost benefits of this form of training are certainly compelling. Classroom training takes up large chunks of many company's annual budgets. The costs include travel, lost productivity and instructors' fees of up to $600 a day. In a report by Forrester Research, 67 per cent of companies interviewed identified cost savings as a reason for adopting online training. Forrester points out that IBM avoided more than $80m in travel and housing expenses in 1999 by deploying online learning across its worldwide operations.

The potential for reducing training expenditure is part of the reason analysts predict a rapid growth in the e-learning market. International Data Corporation's corporate eLearning research programme reckons that the worldwide corporate e-learning market will rise from $1.7bn in 1999 to $23.1bn by 2004, while the European market is expected to rise from $409m in 2001 to $3.2bn by 2006.

"If you look at the number of people and the hours spent, you can make substantial savings," says Nick Van Dam, chief learning officer at Deloitte Consulting. "By taking an eight-hour classroom programme and putting it online, you can cut it back to three to four hours."

This dramatic reduction in course times is because programmes can be tailored to individuals. Class-based training can be inefficient since, within any given class, there are trainees with different levels of expertise. For those with greater experience and knowledge, much of the course may already have been covered.

By contrast, online courses can pre-test trainees to ascertain their level of knowledge and then adapt the course structure to their needs, reducing time wasted in covering old ground.

At Norwich Union, for example, knowledge=power, an e-learning provider, has developed a course to help the company's financial advisers pass the mandatory advanced financial planning certificate. The course, which was originally developed in a CD-Rom version, enables trainees to access their tailor-made programmes via encrypted personal pin numbers.

This kind of flexibility has another important implication for financial firms such as Norwich Union. In a world where regulations are constantly changing and greater transparency is high on the agenda, it is crucial for companies to be able to update their training programmes quickly. The faster the sales team can be trained in a new product or service, the greater the company's competitive edge over its rivals.

Nevertheless, introducing an e-learning system can represent a sizeable initial investment, particularly if an office is not fully web enabled. And staff, particularly the older members, may be resistant to changing their way of participating in training courses. A shift in culture may therefore be required for those who are not computer savvy.

Here, however, the financial sector has a distinct advantage. "There are so few parts of the financial corporate world that aren't touched by technology," says Paul Henry, executive vice-president of marketing and sales development at SmartForce, a leading e-learning provider. "People who work in the financial services sector have no problem whatsoever [with e-learning]. They're on a screen all the time, so it's just part of what they do."

However, for even the most computer-literate executive, the benefits of online training will diminish considerably if the company does not have a sufficiently powerful network to support heavy internet use.

And setbacks to the widespread introduction of broadband technology, which allows moving pictures, images and sound to be broadcast across the internet, mean highly complex interactive training programmes are unavailable or slow to use.

Eventually, however, as broadband technology gains ground, the scope for creating more imaginative training courses will broaden considerably. Even without broadband, the interactivity already permitted by internet technology makes it possible to employ methods of teaching that would be time-consuming in a classroom.

For example, online business scenario simulations can use trial and error to teach trainees to perform new tasks or to improve the performance of familiar ones.

But, say suppliers and buyers of e-learning, companies would be wrong to abandon the classroom altogether. "Even the most fervent e-evangelists would say that the classroom is still a big part of learning," says Mr Henry.

Sam Woodley, marketing manager for Wide Learning, a leading supplier of financial e-learning, agrees. She believes a blended programme, in which online training is used in conjunction with face-to-face instruction, is the best solution.

"E-learning is not the be-all and end-all of financial training," she says. "But the great thing about e-learning is that you can train everybody to the same standards before they enter the classroom so that the classroom training becomes much more effective."