NFO Merac Study Survey on Banking Usage and Attitude in Saudi Arabia

Dubai, UAE, UNITED ARAB EMIRATES


DUBAI, United Arab Emirates, Oct. 1, 2001 (PRIMEZONE) -- NFO Merac, the largest custom marketing Research Company in the Middle East and an NFO WorldGroup company, has recently completed a large-scale study on the use of banking products and services in Saudi Arabia. This syndicated quantitative survey gives marketers baseline findings on which to guide future marketing strategies, it also helps banks to better appreciate customer attitudes and their relationships with banking institutions.

Usage of Banking Products/Services

The penetration of different financial products and services is lower in Saudi Arabia than in some other neighboring markets in the Gulf. The current ownership of a credit card is at 22 percent, while only 11 percent currently have a personal bank loan/financing. While the number of consumers with investments is low, at 4%, this is in line with other markets in the Gulf region

Current Usage of Products/Services

Credit card ownership was far higher in main cities as compared to provincial towns, reflecting the needs of urban consumers and bank marketing efforts. In Saudi however, it must be remembered that customers have an alternative to cash payment in the form of ATM/SPAN debit cards - around two-thirds of customers prefer to use ATM/SPAN cards for purchases. These cards are the more dominant payment method for low-value purchases, such as supermarket purchases.

Customers attributed their choice of main bank to their involvement with various banking services. Customers who had not progressed beyond basic banking services (i.e. a current account relationship) were still led by proximity of bank, network of branches and ATMs. Customers who used other products such as credit cards and mutual funds were led by other factors such as international banking or advisory services.

Consumer Segmentation - A Key Marketing Tool

Despite low use of banking products and services, the study did identify different market segments with differing banking needs and attitudes. These segments were derived from a battery of need/attitude statements such as attitudes to remote vs. personal banking, involvement in choosing banking products, dealing with Islamic banks, need for advisory services, risk return orientation and so on.

The segmentation exercise identified four segments with varied needs and profiles in terms of income, products/services and banks used. Understanding the driving factors behind each segment showed that banks could compete more effectively by adapting their products and services and by customizing their communication strategy to the needs of each segment.

The four segments identified were: (1) Traditional/Conservative, (2) Islamic, (3) Active, and (4) Islamic Assurance Seekers.

Banks in Saudi need to identify what proportion of their customer base is comprised of each of these segments and adapt their marketing initiatives accordingly. For example, Segment (1), Traditional/Conservative, was more or less indifferent to searching for financial products, more face-to-face interaction oriented and less likely to deal with foreign banks.

Overall, the segmentation exercise identified tremendous scope for banks in Saudi to offer differentiated products & services to different consumer segments. For example, some segments were more local bank orientated, some more foreign/joint venture bank orientated, some more service oriented, and some expected banks to provide advisory services.

TargetMoney highlighted that customer banking needs and expectations have evolved and that increased competition will force banks to discriminate between customer needs.

The study was carried out among working male Saudi and expatriate Arabs, 20 years or older. A total sample of 4,500 individuals was surveyed from the cities of Jeddah, Riyadh and Dammam and six provincial towns.

NFO Merac

An NFO WorldGroup company, NFO Merac has a specialized knowledge of the Arabian culture and markets, providing added value research solutions to a wide range of international clients.

About NFO

NFO WorldGroup is one of the world's leading providers of research-based marketing information and counsel. "Marketing minds specializing in research"(tm), NFO has facilitated Fortune 500 clients' business decisions for more than 50 years by providing in-depth knowledge and understanding of consumers and brands through research. Their services include comprehensive counsel on market evaluation, product development, brand management, customer satisfaction, pricing, distribution and advertising effectiveness. NFO is a worldwide leader in Internet-based research and maintains one of the world's largest interactive panel communities. They are one of The Interpublic Group of Companies (NYSE:IPG), and have majority-owned operations in 40 countries. Visit NFO WorldGroup on the web (www.nfow.com).

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