RealTime IT News

Absa Shies Away From Stand-Alone Internet Bank

[Johannesburg, SOUTH AFRICA] South Africa's largest retail banking group, Absa, revealed yesterday that it has put aside plans to launch a stand-alone Internet-only bank under a seperate brand. The banking group announced yesterday that it has revised its e-commerce strategy and indefinitely put aside plans to launch the Internet-only bank that was initially scheduled to be launched in April last year.

Absa, after monitoring the fluctuating fortunes of stand-alone Internet banks in the global marketplace, opted instead to launch the Internet banking channel under its existing brand earlier this year postponing the launch of the proposed stand-alone banking service. Now it appears that there is no place for a standalone online banking venture of this kind in Absa's e-commerce strategy.

Absa's Santie Botha explained yesterday that after assessing prevailing market conditions, the group decided to shelve the idea indefinitely. Botha commented that while e-commerce still formed a crucial component of the overall growth strategy, that this avenue will be explored in other ways by leveraging off the Absa brand visibility. Botha provided no indication as to exactly what form this e-strategy will take, but revealed that the banking group would be working closely with its technology partner, Datatec, to explore avenues for e-commerce expansion.

Industry analysts say that Absa investors are pleased with the decision to put aside the project. The expense of launching under a new brand, the ill-fortunes of similar Web enterprises and the size of the expected market in South Africa for such an initiative made the project appear too speculative for investors craving stability in the banking sector.