About AMP Bank Ltd.
Question:
Discuss about the International Business for AMP Bank LTD.
AMP Bank Ltd.is an Australian bank. The bank provides commercial banking services for retail and institutional customers. The bank offers loans such as consumer, commercial and mortgage; accept deposits, internet banking, credit cards, insurance and wealth management services. The bank serves Australia based customers (Bloomberg, 2018). AMP Bank Limited is a subsidiary of AMP Limited. AMP Limited is country’s largest retail and superannuation service provider. It also runs the largest life risk business in whole country. The bank distributes products and services through phone and internet banking. The bank has well trained brokers and planners who can assist those clients who are in need of banking services.
AMP Bank Ltd. was incorporated in 1998. It is a financial institution based in Sydney. The head quarter of bank is in Parramatta, Australia. The bank offers advanced online banking and mobile banking application to customers. The bank has more than 1 million customers. The bank has a range of bank accounts to manage money of public. The bank has made recent changes to digital banking experience. Now it focuses on financial management tools. The bank provides greater functionality. The functionality covers products and services. The services offered by AMP are very professional and trustworthy.
AMP Bank intends to offer banking services in Canada. The products offered by bank will be accounts, mortgage loans, commercial loans, consumer loans, accept deposits, internet banking, credit and debit card and insurance. The bank already offers these products in Australia (Anand, Bédard-Pagé & Traclet, 2014). The bank can offer the products and services online. A person does not have need to visit bank to attain products and services. The bank is already a largest retail service provider and can carry functions effectively in economy of Canada.
AMP Bank can enter into Canada by making foreign direct investments. The bank can also engage in cross border lending without being physically present at Canada. It can be done through a correspondent bank. Canada gives importance to expanding range of financial services throughout country. The banks are the core of Canada’s financial system. The country has significant role of international operations in country (Vahlne & Johanson, 2017). The government is also working to improve financial services. The bank can be classified as Schedule II banks under the Bank Act. AMP Bank Ltd. needed to approve grant under part XII of the Bank Act to conduct banking operations in country.
Canada is a country of North America. Canada has common border with United States. It is the largest country by total area. It is a developed country and has a diversified economy. The banking in Canada is considered as one of the safest banking system. The country has the soundest and safest banking across the globe. The country has made significant regulatory changes after the global financial crisis. It has been designed to reduce occurrence of global financial crisis. The Canadian bankers association ensures that the country has a successful banking system by encouraging effective policies. The country has three supranational regulatory bodies to influence banking system.
Commercial Banking Services in Australia
Canada is one of the wealthiest nations in the world. The country has 10th largest economy in the world. The GDP growth rate advanced .4% in the last quarter of 2017. The country grew by 3% in 2017 (Global News, 2018). The household spending in 2017 made the biggest contribution towards growth. It was followed by inventory and business management. The inflation rate of Canada shows a global tendency of decreasing inflation rates since 2011. The inflation rate of country is in good shape when it is compared to rest of the world. The inflation rate was 1.53% in 2012 and it decreased to 1.13%. Again it reached to 1.79% in 2018 (The Statistics Portal, 2018). The Canadian dollar is stable currency in the world. It can be traded by long term investors in considerable volume. It has cumulative market share of almost US$119 billion. The GDP per capita in country was last recorded at 50231.90 US dollars in 2016 (Trading Economics, 2018). The income inequality has increased in the past twenty years of country. The richest person has increased share of total national income while the poor person has lost share. The current population of Canada is 36,887,575 which is equivalent to the .48 % of the total world’s population. The country uses micro geographic data for the location pattern of manufacturing industries. The manufacturing is less localised in country than other countries. The country has one of the best infrastructures in the world. It meets all the requirements of high tech business and international trade.
The relationship between Canada and Australia is highly productive. In the past both countries had trade and economic co-operation agreement to acknowledge mutual benefits (Avkiran, 2017). Canada is a member of WTO (World Trade Organisation) since 1995. The foreign company faces high tariffs for certain products in Canada. There is requirement of import licenses. The trade barriers are to understand differing provincial regulations and due diligence on sale channels. There are also technical standards to specify characteristic of products and the certification requirements before entering in country’s market (Johanson & Mattsson, 2015).
The Canadian economy ranks second. It is second only after Ireland. The country has worked in the last three years with strong growth (Penrose, 2017). Overall the country ranks 9 among 16 peer countries. The economic performance of country is measured by considering three dimensions:
- Economic wealth
- Economic disadvantage and privation
- Economic sustainability
Canada is a democratic country with a parliament government. The government is made up of three parts: federal, provincial and municipal. The country has multi-party system. The dominant political parties of country at present are Conservative party of Canada and Liberal party of Canada. The federal government have more active role in economy. The corruption does not represent considerable obstacle of doing business in Canada. The country has clear cut regulations and transparent courts (Dow, 2016). It has also implemented policies to reduce corruption. If we talk about banks then level of corruption plays role in the applications for bank loans. Canada is the 11th largest economy in world based on the nominal GDP. The country is considered as one of the most stable economies in the world. The European debt crisis and weak state of United states’ economy are risk for country’s governing conservatives.
Advanced Online and Mobile Banking
Canada is governed by the laws. The laws are written, organized and enforced through the legal system of Britain. The English common law is still applies to country however Canada is completely independent from Britain. The law is a collection of precedents and age old understandings that defines the legal concepts in English. This law is not written down as legislation. It is a rule that guides judges in later decision making in the similar cases. The common law can be found only in past decisions not in any code. It also adapts to the changing or prevailing circumstances. It is because judges can announce new legal rules and guidelines (Meadowcroft, Stephens, Wilson & Rowlands, 2017).
The other law is civil law system which is opposite of common law system. It is the French and Spanish tradition of writing which is very precise and specifies laws. The interpret laws are judged in a strict and literal way. It considers the conditions of particular case. It does not consider historical precedent. It considers the general rules to deal with any disputes which may arise. First the courts look into civil code in a civil law system (Kim & Li, 2014). Then previous reasons are referred. Quebec is based on French Napoleonic code and is the only jurisdiction with a civil code.
The property law in Canada concerns right of individuals over land objects and terms within country. It includes personal, real and intellectual property. The foreign investors or companies have full access to Canada’s legal system. The countries have mechanism available for the dispute resolution. The recording system for mortgages and liens is consistent. The right to own property in Canada is not included in the bill of rights. The real property law is a matter of local legislation with incorporation of common law rules (Murphy, 2017).
A business need to be aware of business regulations before starting business in Canada. The rules and regulations ensure that the marketplace is safe and fair to everyone. The federal government have recognized employment standards to make sure that the employees are treated equally. These standards comprise minimum wages, leaves and annual vacations, statutory holidays and hours of work and emergency requirements. Certain industries fall under the federal regulations whereas others conform to provincial or territorial employment standards.
The culture of Canada is mixture of British, Fresh and American. The national language of country is French and English. The non-official languages spoken are German, Spanish to Punjabi and Chinese. The education programs in country begin in kindergarten (age five) and go to twelve grades. After completion of school students can go for post-secondary studies. The Canadian aesthetics association is a regulatory organization of professionals who eager to raise bars for professional aestheticians. It organises education for members. The social organisations of country focus on range of community development and social justice issues. The religion in country comprises a wide range of groups and beliefs. Christian is the largest religion of Canada. The international business management program provides understanding of versatile international management skills and knowledge for growing demand of international trade.
Expansion Plans in Canada
According to Hofstede the culture of Canada is overviewed with six models such as power distance, individualism, masculinity, uncertainty avoidance, long term orientation and indulgence. The psychic distance is the distance between home market and foreign market of country which results from perception and understanding of cultural and business differences (Romero, Laroche, Aurup & Ferraz, 2018). Canada has high context cultural issues and is a perfect place to begin. It accommodates to new organisations. The people of country are civilised, tolerant and relatively informal. Shaking hand is the standard for business meetings. The normal working days are Monday to Friday.
The contemporary issues of Canada include politics, economic and social structures, cultural and arts policy, multiculturalism, science and technology and bilingualism. The banking system was exposed by the crisis in country. The collapse of Lehman Brothers is widespread model of the failure of banking systems (Bastos & Zimmerman, 2015). In 2008, major banks were either failed or rescued by the state. To overcome such issues government focused on some factors such as building capital, reducing leverage and belt and suspenders. The G-20 started with firming bank capital regime. The quantity and quality of bank capital was proposed to improve in the new Basel III rules. The requirement of equity will rise from 2% to 4.5%. It will rise to 7% at the time of new capital maintenance buffer. The new rules will bring more disclosures on balance sheets and will require more capital against the riskier activities such as trading activities and securitisations. The measures will be implemented by government in the next six years. The banks in Canada are constrained by the leverage ratio. It sets a cap on the number of assets can be hold for each dollar of equity. It defends the system from risks (Klinger, 2017). The belt and suspenders approach of ratios establishes two standards for maximum amount of assets that a financial institution can hold related to equity. The FSB and G-20 are continued to put pressure of transparency and peer pressure to ensure the organisation is playing safe. The bank resilience function is much more than just capital. It requires better risk management and better governance (Smallbone, Welter & Ateljevic, 2014).
Canada has the strongest financial service sector in the world. The financial service sector comprises banks, insurance companies, trust companies, credit unions, finance and leasing companies, mutual fund companies and insurance agents and brokers. FDI (Foreign Direct Investment) in country’s financial and insurance industries have reached to $121.5 billion in 2016 (Government of Canada, 2018). The financial firms in country are extremely advantageous. The technology is one of the vast areas to make investment in the financial sector. The country is leader in fostering innovation and creation of companies in the financial technology sector. The adoption of new technology and active investment by leading Canadian venture capital funds are the factors which support leadership. The financial institutions need to align their technology strategies and investments to effectively build business (Li, et. al. 2016).
Banking in Canada
The ageing population affects country in many ways. Out of them some consequences are fairly straight forward while some are regarded as labour supply. The ageing population is ageing more rapidly than in the past years. The country’s ageing population is going to affect government finance in two ways. First is the slowest growth in government revenue which is due to the expectation of economists of slower rate of economic growth. It shows that the largest share of population to be is retirement age. Second, the pressure will be placed on programs. These programs are complex to demographics such as health care and income support programme for seniors (Gierveld, Van der Pas & Keating, 2015).
As the baby boom generation starts to retire, the population is ageing more rapidly. The retirement plans are run on “pay as you go” basis. As the baby boom ages, the contribution rates rises significantly. An alternative is also set as contribution rates at long term levels. Such policies contribute a significant rise in contribution rates. The system copes up with the retirement of baby boom generation. The Quebec government has made proposal to make changes in the Quebec pension plan (Schneider, 2016). These changes are going to increase target benefit payable. The employment earnings from 25 % to 33.3% will increase the maximum earnings recognised for determining benefits and contributions.
Conclusion
From the above report, it can be concluded that AMP Bank Limited can successfully conduct it’s operations in Canada. The bank will be new in country so the macro environment of country has been defined. It is going to help bank to be aware of the business in country. The government and economic factors have been defined for the interest of organisation. The financial services of Canada have defined the scope of banking services of AMP Bank. The factors such as political and legal analysis, culture analysis, ethics and contemporary discussion provides help in predicting business of AMP in Canada.
References
Anand, K., Bédard-Pagé, G., & Traclet, V. (2014). Stress testing the canadian banking system: a system-wide approach. Financial System Review, 61.
Avkiran, N.K., 2017. An illustration of multiple-stakeholder perspective using a survey across Australia, China and Japan. Annals of Operations Research, 248(1-2), pp.93-121.
Bastos, F., & Zimmerman, E. (2015). Connecting Creativity Research and Practice in Art Education: Foundations, Pedagogies, and Contemporary Issues. National Art Education Association. 1916 Association Drive, Reston, VA 20191.
Bloomberg, 2018. AMP Bank Ltd. retrieved on 20 April, 2018. Available on https://www.bloomberg.com/profiles/companies/1295Z:AU-amp-bank-ltd
Dow, S. (2016). The political economy of monetary reform. Cambridge Journal of Economics, 40(5), 1363-1376.
Gierveld, J. D. J., Van der Pas, S., & Keating, N. (2015). Loneliness of older immigrant groups in Canada: effects of ethnic-cultural background. Journal of Cross-Cultural Gerontology, 30(3), 251-268.
Global News, 2018. Canadian economy grows at 3 per cent in 2017, fastest pace in 6 years. Retrieved on 20 April. Available at https://globalnews.ca/news/4058301/canada-q4-2017-gdp-growth/
Government of Canada, 2018. The Canadian Trade Commissioner Service. Retrieved on 20 April, 2018. Available on https://www.international.gc.ca/investors-investisseurs/sector-secteurs/financial-financier.aspx?lang=eng
Johanson, J., & Mattsson, L. G. (2015). Internationalisation in industrial systems—a network approach. In Knowledge, Networks and Power (pp. 111-132). Palgrave Macmillan, London.
Kim, P. H., & Li, M. (2014). Seeking assurances when taking action: Legal systems, social trust, and starting businesses in emerging economies. Organization Studies, 35(3), 359-391.
Klinger, D. (2017). The evolving culture of large-scale assessments in Canadian education. Canadian Journal of Educational Administration and Policy, (76).
Li, Y., Gai, K., Ming, Z., Zhao, H., & Qiu, M. (2016). Intercrossed access controls for secure financial services on multimedia big data in cloud systems. ACM Transactions on Multimedia Computing, Communications, and Applications (TOMM), 12(4s), 67.
Meadowcroft, J., Stephens, J.C., Wilson, E.J. & Rowlands, I.H., 2017. Social dimensions of smart grid: Regional analysis in Canada and the United States. Introduction to special issue of Renewable and Sustainable Energy Reviews. Renewable and Sustainable Energy Reviews.
Murphy, R. S. (2017). Property rights in personal information: An economic defense of privacy. In Privacy (pp. 43-79). Routledge.
Penrose, E. T. (2017). Foreign Investment and the Growth of the Firm 1. In International Business (pp. 33-48). Routledge.
Romero, C. B. A., Laroche, M., Aurup, G. M., & Ferraz, S. B. (2018). Ethnicity and acculturation of environmental attitudes and behaviors: A cross-cultural study with Brazilians in Canada. Journal of Business Research, 82, 300-309.
Schneider, F. (2016). Retirement fund taxation in a nutshell: snippet. Tax Breaks Newsletter, 2016(367), 6.
Smallbone, D., Welter, F., & Ateljevic, J. (2014). Entrepreneurship in emerging market economies: Contemporary issues and perspectives. International Small Business Journal, 32(2), 113-116.
The Statistical Portal, 2018. Canada: Inflation rate from 2012 to 2022(compared to the previous year) retrieved on 20 April, 2018. https://www.statista.com/statistics/271247/inflation-rate-in-canada/
Trading Economics, 2018. Canada GDP per capita. Retrieved on 20 April, 2018. Available on https://tradingeconomics.com/canada/gdp-per-capita
Vahlne, J. E., & Johanson, J. (2017). The internationalization process of the firm—a model of knowledge development and increasing foreign market commitments. In International Business (pp. 145-154). Routledge.
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