In this part we will be demonstrating the effect of competition on bank stability and what are the strategies used in order to gain a competitive advantage over another bank. Two interviews were conducted with Audi Bank and Bank Med in order to understand the topic. The study focuses more on Audi Bank and compares the different offers provided by both banks in order to compete.
We asked Rawan, as teller in bank med in Sodeco branch, questions about the services provided by this bank and how such services can be a way to compete between banks. She said that one of their biggest competitors is Audi banks. One of the ways used to compete is providing similar services to satisfy costumer needs. While in Audi bank, we interviewed Nisreen,…show more content… RESULTS AND FINDING
During the first interview with Audi bank, Nisreen mentioned that one of the biggest concerns that this bank focuses on is being costumer oriented. One of the ways to keep the bank in leading position is to follow business lines diversification by a geographical diversification. It is worth to note that their expansion strategy is a well-managed growth. Moreover, banks are strongly facing a hyper-competitive marketplace. In case you are unable to keep your existing customers, then you’re losing. Bank Audi gives a unique experience built around accessibility, convenience, trust and reliable advices and “clear all the way” promises. Moreover, brand loyalty can be achieved through consistency of the quality of service. Customers want to be confident that the bank will deliver good service every time, not just when it’s convenient. As for the costs for improving such experience, the acquisition of a new bank customer is estimated to be around 200 $ while the typical one generates about 150 $ on average yearly basis. That means that the profitability for the bank will be achieved into the second year. Unfortunately, the annual churn rates on new customers hover in the 20-25 percent range during the first year,…show more content… The issue arises from the fact that half of the customers not making it past 90 days of opening their account and the cost of acquiring new customers is six to seven times more than keeping an existing customer which is around 1400$ per new customer, the cost was high and royalty programs came to existence to help decrease the rate of customers closing their accounts. Based on customer’s life style, behavior, they are awarded a royalty