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Monday, 8 April 2013

Islamic banks need comprehensive marketing approach

Marketing of banking services is highly sponsored by banks and financial institutions CEOs, to maximise their processes, types, figures and subsequently their profits. That in addition to their exerted efforts to attract new clients, thus during last decades, all banks established independent marketing departments and divisions. These new functions serve different type of customers, and mainly set the plans, programmes, procedures and strategies that enable banks to achieve their objectives and targets.

Accordingly, Omani Islamic banks are expected to follow a comprehensive marketing approach to promote themselves as an alternative for traditional banks (if possible). In other words, Islamic banks need to apply Sharia-compliant recent banking applications. The changes that occurred in the Arab world in general and the Islamic banks in particular during the last three decades, required increasing the investors’ awareness with Islamic banks principals and concepts. Those are derived from the Sharia, Islamic economic principles, Islamic provisions and jurisprudence.

Islamic banks are required to collect and direct investors’ savings properly to serve different depositors and investors. Thus, improve Islamic services locally and regionally, economic and commercial aspects that rely on economic concepts, Islamic basics and banks nature (Islamic or other).

In our efforts to support Islamic banks, we have to consider their late entry to commercial works (in Oman), compared to traditional banks which started more than 40 years earlier, moreover their late entry to the Omani market. We all know that Islamic banks will operate in a highly competitive environment, thus they should have the ability to market their works and services. Furthermore, all new products have to be marketed properly in a way that satisfies the society requirements, expectations and desires.

Undoubtedly, Islamic banks have to follow a comprehensive marketing approach and policy, in order to penetrate the business environment controlled by the experienced traditional banks.

Worth mentioning, Islamic banks require several decades to introduce their Sharia-compliant and advanced services as an alternative to those of traditional banks. However, it is better for them to operate according to contribution, harmonisation and integration methods through offering Sharia-compliant solutions for commercial relations and transactions. Moreover, these services should be offered by means that were never (historically and practically) offered by traditional banks. At the meantime, they should consider the risks of financing goods and assets (for ex. real estate and machines) according to Murabaha and Musharakah basics, knowing that the risks would be greater than those of the commercial banks.

Islamic banks in Oman will only succeed in introducing and marketing their services/products by conducting studies, researches and interviews with retail and corporate clients, including merchants, consumers, businessmen, employees, etc. These banks should satisfy clients’ requirements through saving and financing means. Thus, they should start to conduct studies, R&D for Islamic products, under the supervision of Fatwa and Sharia committees formed within each bank. Further, any service-related issues should be settled according to the jurisprudence of transactions. Not to mention, they should find modern solutions for financing and saving services, given the increased complexity of such services.

At the same time, Islamic banks should increase awareness with related features, controls and conditions. That could be done through holding seminars, lectures and conferences at institutions and universities. In addition, improve the investors’ (individuals, communities, students, teachers, workers or employers) awareness with saving concepts and change individual consumption behaviors. Entirely, that serve in directing the saving advantages towards developmental and investment plans, thus creating job opportunities and other benefits.

Most importantly, Islamic banks should select and employ national calibers, and ensure proper development and training opportunities. The selection process (of those who will work at banks and deal with clients) should be done meticulously to avoid any client-related issues and ensure moral, social and religious commitment. In addition, Islamic banks should tend to select candidates with scientific, professional and personal competencies.

All in all, Islamic banks have to be aware of the fact that the best successful way to market their products/services and convince the crowd is by introducing them in a high-level, swift and untraditional manner. Baring in mind that flexibility is considered of the main aspects in the jurisprudence of transactions and an effective factor to successful banking processes, especially those of Islamic banks. The competition today does not depend solely on the cost, but it extends to the manner and flexibility of offering the services, and timely response to the clients’ remarks and complaints.

(Oman Daily Observer / 08 April 2013)

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