Question 1

The emphasis that is now put on the retention programs is explained by probability of involving more customers with less investment. Therefore, customer loyalty programs like reward points etc. are a clue for getting more people in the bank and making them come for financial services and assistance more and more.

Image, quality and satisfaction are considered to be the most important parameters of client retention in banking. However, as Kassim and Souiden (2007) explain retention, “retention may be demonstrated in multiple ways; for example, by expressing preference for a company over others, by continuing to purchase from it or by increasing its business in the future through continued purchasing” (p. 218). Therefore, customer loyalty programs are one of the forms of business increase in the future through continued purchasing. Customer loyalty programs are specially designed for continued purchasing. Point system and rewards that come together with point do not promote company image or increase satisfaction. Neither have they improved service quality. But the overall existence of customer loyalty programs pushes people to buy from the same company for more than once.

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In banking sector, it is essential to continue working with the same clients. They have the same stable credit history; they already know what types of services and what level of customer care the bank provides to its clients. These customers usually know what to expect, and that is why they seldom are unsatisfied. Consequently, it can be concluded that customer loyalty programs in banking sector serve as direct instrument for customer retention and result in increasing the most important parameters of customer retention – service quality, customer satisfaction and company image.

Question 2

Customer care aspects stated in the table are bank employees, integrity of the bank, its products and services, and overall banking environment. These four aspects call for customer attention during the whole period of bank communication. However, the communication itself, which is another important factor, is not considered. In technological age, banking communication is critical factor for the developing countries. In most cases, the developing countries do not have advanced banking services offering all types of communication that one may find in other banks of the European Union and the United States. That is why existence of the internet-based account management systems for clients is a necessary element for client satisfaction in banking. For this reason, bank communication facilities should be treated as separate factor besides banking environment, products and services, and bank employees.

Another important factor that should also be mentioned in table 4 is bank location. Nowadays many customers are traveling around the world, and it is crucial for them to keep their money in international banks or banks which have availability of the customer service worldwide. Call centers are the easiest solution in this case. However, more and more banks are now opening their offices overseas to cater for their clients’ needs and to ensure competitive advantage on the market.

At the same time, bank location is also critical in terms of client expenses. If the bank can allow its presence in more than one city within the United Arab Emirates, it shortens mailing expenses for the clients who usually reimburse these costs for the bank. Whenever the client needs some sort of mail from the bank, if the bank is available locally, the customer is satisfied due to lower expenses for account maintenance. This usually keeps retention rates high enough.

Question 3

The recent survey conducted by Ernst & Young in terms of customer care in banking showed that together with globalization and the continuing growth of world markets, the customers of the world banks are getting more and more demanding. The retention of customers becomes a difficult challenge for both developing countries and developed countries. Due to the fact that banking services are no more surprise even for the developing countries, the clients demand more and more control of their banking relationships. The results of the study show the need for banks “to embrace this trend and give more power to their customers” (Ernst & Young, 2012, p. 3). The growing need to satisfy banking customers creates more needs of the customers themselves. If before the customer care in banking involved the standard quality provision of products and services, nowadays banking relationships have become more personal and individualized. Due to the fact that the United Arab Emirates is the country with large number of rich people, banking services should become more personal and sophisticated to reflect the overall luxury tendency in the country’s domestic market.

Banking confidence is usually associated with assets in the Middle East. Customer retention, as Kassim and Souiden (2007) conclude, is a combination of psychological impacts from image, satisfaction and quality, while none of them directly influences the retention rate. Therefore, it can be concluded that in general banking services in the United Arab Emirates are quite difficult to manage in terms of customer care. However, by finding the instruments of ensuring the bank stability, its political role in the Muslim world, its overall care of the customers in terms of service quality and, finally, by providing valid appreciation of its client’s powerful image, the bank in the United Arab Emirates can get high retention rates and, at the same time, attract a lot of new clients. In most cases foreign banks that are performing on the Middle Eastern markets are not successful among local customers due to their failure to fit the local culture and local lifestyle. Banking services are all about seeing the clients and understanding their needs. Assisting clients and stressing their importance to the bank will help the local Middle Eastern banks outperform their competition from abroad in the long term period. This trend, if implemented successfully, may bring client recognition even overseas.

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