The state of competition in the Saudi banking sector

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Saudi banking institutions are among the most important drivers of the Saudi economy since the establishment of the Kingdom, as the strength and durability of the banking sector in the Kingdom increases the strength of the Saudi economy’s competition in global competition, which increases challenges for the Kingdom and its financial sectors. The Kingdom’s accession to WTO membership is accompanied by economic openness and reduced government support and protection for the banking sector, which makes Saudi banks face tough competition led by foreign banks that compete to enter the Saudi financial sector promising investment opportunities, especially as the Kingdom is on the verge of an ambitious stage of growth in various economic sectors. That contributes to achieving Vision 2030, so it is necessary to develop Saudi banking services to be at a high level of competition.Saudi banking institutions play a prominent role in economic development, as they have contributed to the recruitment of national cadres, increasing and circulating capital, and supporting public and private sector institutions with loans that have contributed to the expansion of their projects. The banking sector has contributed to the training of Saudis who have joined it, as a large number of them occupy high leadership positions that have contributed to making strategic decisions that we see results today.

Despite the tangible progress in the Saudi banking sector, it is still not competitive compared to what foreign banks have achieved in many developed countries such as Japan, the United States, Germany and other developing countries. The Saudi banking sector lacks extreme sensitivity towards the customer, both in terms of quantity and quality. Banking services provided or meeting the requirements and conditions of the business sector with loans. Undoubtedly, the banking sector in the Kingdom needs to develop the quality of services provided to its customers, because the arrival of foreign competitors means that customers of Saudi banks go to competing foreign banks to meet their needs with services that they do not find in our national banks, most of which still follow the old behavior and methodology in dealing with customers.

The marketing of Saudi banking services in most Saudi banks is still based on old concepts that they followed when the competition environment in the financial sector was limited to a few competitors to serve a large number of customers, which made the power of negotiation in the hands of banking institutions and thus negatively affected the quality of their services. The game has changed today with the increase in the number of international banks competing, so that the power of negotiation in terms of price and quality is in the hands of customers, while it was previously in the hands of the seller who sets the price that brings him a high profit regardless of the customer’s satisfaction or not. Saudi banks must be sensitive to social responsibility because the failure in this aspect is clear to customers.

E-Business is developing globally in the field of finance and business, and that is rapidly in terms of quality, quantity and marketing means, which puts pressure on our national banks to keep pace with them to form local and global competition. And it must be highly aware of the problem that electronic hacking poses to its customers’ accounts, which negatively affects withdrawals and deposits.

dr_abdulwahhab @





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