According to the 2012 annual report of ACLEDA Bank, ‘Cambodia's financial market with its liberal regulatory environment is highly competitive with more than 35 commercial and specialized banks. Amongst the commercial and specialized banks, ACLEDA Bank managed to maintain its position as a market leader in terms of assets, loans, deposits and profitability, as well as in the number of offices and ATMs throughout the country’ . Furthermore, ‘ACLEDA Bank Plc. network had 238 offices covering all provinces and cities in the Kingdom of Cambodia’ . Based on these data, ACLEDA Bank seems to be in a very competitive position. Furthermore in a country where financial infrastructure is less developed, ACLEDA Bank is able to take advantage of it because it has market dominant power.
According to the 2012 annual report of ACLEDA Bank, one of the strategies of ACLEDA Bank for 2013/2014 is ‘to increase investment in MIS and IT systems, and to develop and introduce electronic banking services, thus launching internet banking’
Therefore I will review whether it is desirable to launch an internet banking service considering the weight of ACLEDA Bank in the whole banking industry of Cambodia and the financial environment of Cambodia. First I will review the benefits and drawbacks of internet banking, and next I will use cost and benefit analysis and SWOT analysis to make a conclusion.
II. Benefits and drawbacks of internet banking
Internet banking has become a standard of monetary transactions for over the past decade. Internet banking gets popular due to the easy and fast way of checking customers’ account. However along with conveniences of internet banking, there are some drawbacks
A. Benefits of Internet Banking
There are plenty of benefits offered by banks to customers who use internet banking.
Convenience: This is the most important benefits that make transactions and payments right from the home or office with just clicking a button. Keeping track of accounts through the internet is much faster and convenient as compared to going to the bank. Internet banking also provides services like ordering check books, updating accounts, enquiring about interest rates of various financial products which are much simpler.
Better Rates: By using internet banking, the need to acquire larger spaces for offices and employ more staff to deal with the customers is reduced, making it financially beneficial to the banks. Thus, a portion of savings can be passed on to the customers in terms of higher interest rates on deposits and lower interest rates on loans.
Services: Internet banking has made it extremely convenient for the bank as well as the customer. These services include financial planning capabilities, functional budgeting and forecasting tools, loan calculators, investment analysis tools and equity trading platforms which are available as on the bank's website.
Mobility: Internet banking has developed in the last few years in the...