By Mary Gahan BBC News Online business reporter

His nostrils flare, his eyebrows rise and fall and his eyes blink in a constantly repeating series of movements as he waits for your decision.

His head, which moves gently from side to side, is floating. He has no body.

Advice from an avatar

When he speaks, the lip movements are puppet-like.

Would you buy a mortgage from, or trust your savings to, this creature?

In BT's vision of the future, that is exactly what people will do.

A team at the BT Exact research laboratories at Adastral Park, near Ipswich, is developing this three dimensional financial adviser and trying to make him more human.

A real financial adviser

Virtual characters, or avatars, already appear on websites and particularly in computer games.

Gary Crook says the avatar is more realistic

An avatar called Ananova reads the news on the website with the same name.

The failed fashion website boo.com used an avatar called Miss Boo to help customers shop online.

BT wants to develop the idea so that customers of companies such as banks will be able to log on to a website, and feel they are dealing with a real financial adviser.

Face to face

Gary Crook, BT Exact's finance sector manager, admits that many of those who have seen the floating head find it scary.

But he says: "This has developed from something that was very unrealistic to something that is more realistic"

He says work to make the avatar more human is continuing, and financial services companies are already interested.

I don't want to look at an avatar of my bank manager

Jon Newman, Datamonitor

Ambrose McGinn, Abbey National's director of retail e-commerce, keeps a close eye on any developments in technology.

But he's not sure the bank's customers would want financial advice over the net.

"Our feedback is that they like to see people face to face, that's real people who have real emotions and who can share the subtleties and the important factors of our customers' particular position."

That view is backed up by research from the Council of Mortgage Lenders (CML).

It found that the internet was highly popular with customers for gathering information and comparing products, but the number of online mortgage applications was low.

The CML said customers still wanted face to face contact for large scale financial commitments.

Missing the point

Jon Newman, director of financial services technology at the market analysis company, Datamonitor, questions the need for computers to behave like human beings.

"Avatars have a terrific application in gaming but I don't see yet how they have a business application."

"The reason I would be using the web is so I don't have to talk to anybody or be embarrassed about my overdraft."

"Dressing it up like a human being is rather missing the point."

"I don't want to look at an avatar of my bank manager."

Mr Newman thinks BT's problem is that it has to push at the boundaries of technology.

"It cannot really know how that technology will be used, but it has to stay at the forefront," he says.

Speaking to the computer

Avatars are not the only technology being developed at Adastral Park.

BT's house of the future at Adastral Park

If telephone recorded voice systems already fill you with despair, then you might not be too keen on another of BT's plans to change financial advice over the internet.

It is called Gabrielle, and would allow you to fill in an application form at your computer by speaking, rather than by clicking the mouse.

For example, by saying "mortgage" you would be able to go straight from a main menu to a mortgage section.

You would be able to speak to the computer over the internet, on a fixed telephone line or via a mobile.

BT says it is now looking for a company to help conduct trials of the system.

Replacing human beings

Work is also going on to refine other voice recognition systems where, for example, you could order a brochure by speaking to a recorded voice.

Ambrose McGinn: new technology has a useful role to play

Jon Newman, of Datamonitor, thinks these systems will be commercially attractive.

"If you can take human beings out of call centres, there are going to be very, very clear cost savings."

Ambrose McGinn, of Abbey National, is also keen to see these good voice recognition systems being developed.

"I think there is an opportunity for them to really make our customers lives easier and save them some time."

But as far as he is concerned, there is not yet a system that would be able to deal with large numbers of customers effectively.

"I'm looking forward to seeing a product which is up to scratch, if you like, in terms of recognising the nuances of local dialect and the like."

That is exactly the problem the BT team is trying to master.