Executive Summary of The Customer Satisfaction of Bank Muscat

            The report is written on the current performance of Bank Muscat which is a leading financial service providing institute in the State of Oman. The key focus of this report is to explain how decreasing customer satisfaction level is an issue for Bank Muscat. In the report, research studies and organizational reports are used to support arguments and facts related to this issue and the possible impact of this issue on the performance of Bank Muscat. Summarizing, the financial profitability and future business reputation of the Bank Muscat is mainly depending upon the satisfaction level of its customers in the targeted market. Easy availability of alternative solutions and competitive threats make this issue more critical for the organization.

          Conclusively, the analysis represents that Bank Muscat will have a decline in its profitability and revenue stream in future if bank management fails to make their customers satisfied towards their offered products and services. Thus, to overcome this issuing bank should identify the key contributing factors for dissatisfaction by collecting feedback and responses from customers. Moreover, paying attention to the employees performance improvement , and better communication  styles  are also required  to control this issue.

Customer Satisfaction

Introduction of The Customer Satisfaction of Bank Muscat

           The banking industry needs continuous improvement and betterment to remain sustainable and satisfying for its customers. Customers want to use the best banking services to avoid insecurities and frauds in a monetary transaction. Somehow, banking services are not limited to facilitating business transaction or exchange of money. Banks also work as investment institute to provide loans and investment opportunities to the households. Somehow, all these services are really critical in nature. Currently, banks work as a for-profit institute and profitability of a bank directly depend upon the total number of loyal customer of the bank. Therefore, banks pay special attention to the improvement and betterment of their services to make their customers satisfied. In this report, a critical issue of customer satisfaction for Bank Muscat is discussed in detail with relevant suggestions and recommendations to control this issue.

Organizational Overview and Background of The Customer Satisfaction of Bank Muscat

             Bank Muscat is the top financial services providing institute in Oman since 1982. Currently, Bank Muscat has more than 150 branches across Oman that deals with corporate banking, retail banking, and investment banking services. The Bank Muscat mainly offers its banking and financing services in the local targeted market. According to the information provided by the bank, Bank Muscat has an e-channel that facilitate the investment and banking services for the customers who want to avail online services rather than visiting a bank of their locality. The e-channel of Bank Muscat include online bills payment services and digital shopping process for selected e-commerce websites (Bankmuscat.com, 2018). Corporate online banking, personal online banking, mobile banking, BM offers, and BM wallets are the key services provided by the e-channel of Bank Muscat. Moreover, recent reports published by the Bank Muscat present that the bank has more than 3779 employees who contributed to generating revenue of $1.5 billion in 2018.

              According to industry analysis, the banking sector is rapidly growing and advancing in the markets of Oman. People prefer to use banks for online transactions and payment instead of using cash currency. Moreover, the trend of investment in the banking sector is also increased in the market. Somehow, the growing banking sector has also increased competition in this industry of Oman. Until late 1900, Oman had just a few banks including Bank Muscat and National Bank of Oman. However, now many new local and international banks are working in Oman which includes top competitors banks of Bank Muscat such as Bank Nizwa, Ahli Bank, Bank Sohar, Alizz Islamic Bank, Bank Dhofar, and Oman Arab Bank.

       Conclusively, the overall banking industry is competitive for Bank Muscat. Considering the aggression of competitive forces Bank Muscat does not afford a single mistake to remain sustainable and competitive in the targeted market. Competition is a major challenge for Bank Muscat. Therefore, corporate management of Bank Muscat is required to develop strategies for competitive advantage and sustainable growth of business without compromising on customer value and customer satisfaction level. Somehow, internal analysis and business analysis of Bank Muscat indicate that lacking customer satisfaction level is the critical issue for the organization which is discussed in detail in the following section. 

Critical Issue for Bank Muscat

            According to the analysis of Bank Muscat, the organization is having a critical issue of decreasing customer satisfaction level in the local market of Oman. See the following chart representing a continuous decrease in the total number of customers in one year duration for the Bank Muscat as reported in the annual report.

Figure 1 Total Number of customers from 2014 to 2016

              According to the literature, four customer satisfaction driven factors are perceived quality, cost, convenience, and compliance. Customers become dissatisfied towards offered products and services when organizations fail to deliver their promised services and products to the targeted customers. Moreover, the cost is also a contributing factor for change in customer satisfaction level towards an organization. For instance, higher services chargers and product prices contribute to decreasing the customer satisfaction level.

              Recent research studies conducted on customer satisfaction and financial performance of the companies indicate the important role of customer satisfaction in revenue generation and profit maximization for the shareholders. The decrease in customer satisfaction results in the customer churn and customer switch to the alternative products and services available in the target market. Following research studies, customer switch to alternative products results in the loss of a regular revenue stream by that particular customer which create challenges for the business profitability of an organization. A relevant research study conducted in the market of UAE and Oman concludes that the quality of banking services and e-banking services are directly related to the customer satisfaction level in UAE and Oman. The following bar chart represents the perceived customer satisfaction towards the quality of banking services provided by the Bank Muscat and other competitors (Kamal & Ahmed, 2009).

            Considering the above bar chart, it is clear that decreasing customer satisfaction level is not mainly because of service quality provided by the Bank Muscat. Somehow, there are some other contributing factors to this issue. 

Contributing Factors to the Issue of Bank Muscat:

           The customers of Bank Muscat were satisfied with the offered services in past years. Somehow, currently customer satisfaction level is gradually decreasing because of some contributing factors such as the increase in competition, the excessive variety available for customers, increasing cost of services, market reputation, the interaction between employees and customers, reliability, creditability, security, and bank’s focus on improvement based on the customers’ feedback. The following graph represents the contributing factors for customer satisfaction in Oman Banking sector (Kamal & Ahmed, 2009).

The key contributing factors are discussed in detail in the following paragraphs to understand the contribution of these factors in decreasing customer satisfaction level of Bank Muscat.

         The first key contributing factor for the decrease in customer satisfaction is the discontinuity of the improvement process in the Bank Muscat. The management of the bank is lacking digital advancement and technology adoption for improvement in services. The competitor bank “National Bank of Oman” has several opportunities for its customers to buy online using their bank cards and online bank accounts. However, Bank Muscat lacks advancement in technology therefore still many advanced banking services are not available to the customers of Bank Muscat which contribute to reducing customer satisfaction level towards a bank.  

          Moreover, the second key contributing factor behind decreasing customer satisfaction is limited attention given to the customer feedback. In Bank Muscat, all decisions are taken by the corporate management and top management of the bank. In the decision-making process, the bank does not include employees of non-managerial positions such as front desk officers, customer support providers, and cashiers. However, these employees have a direct interaction with the customers. Based on the continuous interaction with customers they can provide better information and feedback of customers regarding banks services. Somehow, because of overemphasis on corporate management suggestions bank management ignore the customer feedback in the decision-making process which contribute to reducing customer satisfaction level towards Bank Muscat (Kamal & Ahmed, 2009) (Ananda & Devesh, 2018).

               The third contributing factor for the decrease in customer satisfaction level is a delay in responses. The online banking system of Bank Muscat takes more time in processing as compared to other banks. While customers are also dissatisfied with the long delay times at bank for the delivery of their required services. Thus, the delay is also a contributing factor to reduce customer satisfaction level towards Bank Muscat (Sawant, 2016).

          The fourth and most impactful contributing factor for decreasing customer satisfaction level is limited focus on image building. The competitor banks of Bank Muscat have full-active social media pages and websites for the promotion of services and products. Although, they use digital media and advertisement for image building and grabbing the attention of consumers towards their offered services. Excessive marketing and advertisement for image building by the competitor banks also contribute to decreasing customer satisfaction level towards Bank Muscat which has a very limited focus on image building strategies (Sulthana, 2018).

Impact of Issue of Bank Muscat:

             The customer dissatisfaction results in a negative impact and implications for the business of a bank. Following the research studies and real-life case studies, customer satisfaction contributes to increasing profitability while reducing customer satisfaction raise questions for the future stability and performance of an organization. The current customer satisfaction related critical issue of Bank Muscat will also generate an impact on various aspect of the business such as financial performance, people of organization, marketing, operational management and project management strategies in the bank.

People: the identified issue will draw an impact on the people of Bank Muscat in a negative way. Increasing customer satisfaction level encourage organizational leaders and employees to improve their performance. Somehow, decreasing customer satisfaction level will create job insecurities and probability of higher turnover rate in the organization. Moreover, decreasing customer satisfaction level creates challenges for performance and creativity as well. Following research studies, customer satisfaction and organizational creativity are related. Employees creativity and innovative behaviour promote customer satisfaction level (Devesh, 2016).

Financial Aspect: the identified critical issue of decreasing customer satisfaction represent a higher future probability of a negative impact on the financial condition of the Bank Muscat. In case, this issue not handled properly by the Bank Muscat than in future bank will have a decrease in its income. Although, currently revenue stream of Bank Muscat is increasing as presented by the annual reports of the bank. Somehow, a declining trend is expected because of increasing customer dissatisfaction towards the provided banking services and products by the Bank Muscat to its selected geographical segment of Oman. Following research studies, the banking sector cannot afford a decline in its revenue stream otherwise banks face critical liquidity issues. Thus, from the financial perspective decreasing customer satisfaction level is not a major issue until now but it is expected to have a negative impact if not controlled by the bank manager with proper mitigation plan (Bankmuscat.com, 2018).

Marketing: According to the research studies, advertisement and marketing are the supporting factors for image building. Because of customer dissatisfaction bank cannot have really influencing marketing and advertisement. Customer may not pay proper attention to the marketing and advertisement efforts of the bank because of their decreasing interest in the services and products of bank Muscat. In such a situation, the budget spent on the marketing and advertisement campaigns would not really worth until bank support its marketing and advertisement campaigns with strong image-building strategies or promotional benefits.

Strategy: the issue can also have an impact on the current strategy of the business. Bank need to make changes in the current business strategy to overcome this issue before it causes a negative impact on the financial status of the organization. Additionally, for a remedial solution bank would also need to make changes in its business model, for instance, shifting from manual banking to online banking system. Somehow, while making changes in business strategy the macro-environmental factors such as social, cultural, economic, technological, and legal factors should be taken into consideration by the bank. For instance, Oman is moving toward technological advancement and e-banking systems. Therefore, considering this bank should adopt the latest e-banking technology in their business operations at the extent that meets the needs of customers rather than creating complexities.

Project Management: Currently decreasing customer satisfaction level will also generate an impact on the future and recently started new projects of the bank. For example, the bank cannot pay emphasis on the projects which will contribute to the increase of customers dissatisfaction because of the inability to resolve the issues of customers. Thus, while making decisions for the future project or recently started projects the management of the Bank Muscat needs to consider the reason for customer dissatisfaction thus bank would be able to control such issues.

Recommendations and Solutions of Bank Muscat

            In the above section of this report, a critical issue for the Bank Muscat is discussed in detail. According to the analysis, this issue can have a negative impact on the financial performance, employees performance, leadership system, and marketing of the bank. Somehow, in this section, some recommendations and solutions are enlisted for the management of Bank Muscat to control this issue and reduce its impact on the performance of the bank.

1.      Customer Service Communities and Feedback of Bank Muscat

          First of all, Bank Muscat should create customer service communities to interact with customers and collect their feedback about services. Customer feedback should be the base of improvement plans in the bank thus bank would be able to satisfy their customers. For this purpose, the bank can create social media pages and customer support platforms. At these platforms, customers should be allowed to share their experiences and feedback for improvement. In light of feedback, bank management can better understand the key reasons behind customer dissatisfaction as well as customer satisfaction. Thus, based on real feedback improvement can be easily made.

2.      Performance Evaluation and Benchmark Analysis of Bank Muscat

          According to the research studies and literature review, employees behaviour and interaction with customers also influence customer satisfaction level towards offered services. In the banking sectors, customers mainly depend upon the services provided by the cashiers and other front desk officers. Therefore, behaviour and communication styles of these employees can have a direct impact on the customer satisfaction level. Performance evaluation and benchmark analysis of the employee's performance can highlight gaps for improvement. For improvement in customer satisfaction level, the bank should improve the behaviour and communication style of bank staff. Regarding this, employee’s training programs should be organized to improve customer experiences (Karen Beaven, 2019).

3.      Develop Motivation and Engagement in Employees of Bank Muscat

            Incentive programs and commission-based programs should be introduced in the Bank Muscat to motivate employees towards performance improvement. Improvement in the employee performance will surely result in the betterment of customer satisfaction level in the Bank Muscat.

4.      Customer Driven and Value-adding Solutions of Bank Muscat

          Customer Driven” means more than just talking to customers and giving them what they want. Customer-driven services and value-adding solution work as a marketing approach to make customers satisfied with the delivered services or products. According to this approach, customers get satisfaction when their needs and requirements are fulfilled by the organization. Therefore, rather than delivering the same traditional banking services to the customer's Bank Muscat should introduce value-adding services in their services line. For instance, the Bank can conduct a survey to get the opinion of the customer what kind of services customers need or expect from the bank. Thus, by providing a solution to the identified needs of customers bank can create value.

5.      Image Building with Positive Marketing of Bank Muscat

           Bank Muscat lacks marketing and advertisement campaigns. Marketing and advertisement play an important role in customer satisfaction. Customers prefer to purchase services and products from the organization which has a positive image in the market. While sometimes lack of awareness towards offered innovative products and services also create customer dissatisfaction. Therefore, to create a positive image in the targeted market and to spread awareness about new innovative solutions of Bank Muscat, management should pay special focus on positioning and marketing by all possible means such as digital media advertisement, social media campaigns, and print media advertisement (Kotler, 2012; Hill, 2012).

6.      Improve Service Quality of Bank Muscat

Bank Muscat should also pay attention to its services quality improvement by the adoption of the latest technologies and encouraging ease for the customers. For instance, user-friendly mobile applications for e-banking services can reduce complexities for customers. Such initiatives will also improve overall service quality and customer satisfaction level towards Bank Muscat.

7.      Long term Goals and Wealth Maximization Strategy of Bank Muscat

Last and the most important recommendation or solution for the identified issue of Bank Muscat is for the corporate management of the bank. Corporate management should develop strategies and policies for the bank with a focus on long term goals and benefits rather than short term profit-making strategies. Instead of paying attention to short term profit bank should focus on long term wealth maximization Cost-cutting strategies can increase profit for a short term period. While the money spent on image building and customer relationship building can benefit a bank in long term duration by creating customer loyalty and customer equity for the Bank.

Conclusion of Bank Muscat

           The whole discussion concludes that Bank Muscat is working Oman with more than 150 branches across the selected geographical segment. Currently, the banking sector is advancing and growing in Oman. Following annual reports, the revenue stream of Bank Muscat is inclining each year somehow customer satisfaction level represent a declining trend. The analysis represents that poor service quality, delay, limited marketing, lack of attention towards image building, limited focus on customer feedback, and customer interaction with a staff member are the key contributing factors for the decrease of customer satisfaction level towards Bank. Summarizing recommendations and solutions, Bank Muscat can overcome this issue by collect feedback, customer relationship building, quality services, and focus on customer-driven solutions.