This market dominance poses challenges not just for smaller banks, but also for new entrants who are looking to gain a share of the pie. Yet, despite this, there is an increase in the share of customers dealing with smaller banks when compared to two years ago.
This is largely attributed to the need for a more personalized service amongst this growing segment, which small banks are perceived to offer. Interestingly, customers of small banks were more likely to be younger and belong to higher income groups, when compared to their counterparts who deal with larger banks.
The findings also highlight the increased interest and consequent relevance of Islamic Banking as an alternative banking method. Jordanian banking customers stated a bank’s “compliance with Islamic banking methods” as one of the major criteria for choosing a bank to deal with. Others include branch and ATM coverage, in addition to a bank’s reputation and financial stability. Furthermore, while salary transfer joins the ranks as a prominent reason for current choice of bank, it is not considered a determining factor when customers are given a choice between different banks. This implies that, while banks may succeed in acquiring retail customers through corporate banking, these “captive” customers could be less loyal and more prone to switching.
Where performance is concerned, customer satisfaction levels with banks in Jordan on a sector level still fall below Ipsos Jordan’s National Satisfaction Rating of 7.9/10, (covering a wide variety of service sectors), in addition to the Ipsos Regional Banking Sector Index (7.8/10), thus indicating the existence of a weakness in the servicing element. Jordanian banking customers are most dissatisfied with credit related services such as loans and credit cards, yet areas of dissatisfaction vary significantly when looking at specific banks as well as different customer segments.
Despite the growing abundance of different banking services, Jordanian banking customers remain relatively less sophisticated than the current level of market offering seems to suggest, with customers displaying low awareness levels towards the more progressive services such as phone, online and SMS banking. This has translated to even lower service usage levels, and, consequently, the low relevance of such services to customers’ needs. The implications that this has on the sector remain to be seen, but, for now, it is sufficient to acknowledge that marketers face the challenge of encouraging adoption amongst a population that is at its core, less savvy.
Ipsos is a global survey-based research company and is present in 65+ countries. Ipsos, which currently ranks as the 2nd largest survey-based research company worldwide, has been operating in Jordan since 1998.
After a successful launch in 2008, the second wave of Bank Scape – the Syndicated Study for Banks in Jordan, was launched by Ipsos in Q4 2010. The survey interviewed a sample of 1,200 respondents whose profile is representative of the banking population in the cities of Amman, Irbid and Zarqa. Face-to-face interviews were the utilized data collection method of the study.
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