research
Research Proposal
An analysis of competitive advantage effectiveness and digitization in Saudi nationalized Banks
Submitted by
Researcher / Rawia Al-Madani
ID / 160020468
Abstract
The paper aims to discuss the advantages of having a competitive advantage in the banking system. RIYAD and NCB Bank are one of the two largest Financial institutions in Saudi Arabia , ranked by their assets and wide financial services , Also the two Banks are known of their accessible digital banking channels which made E-transactions the most easiest and the quickest than most banks in the Kingdom .For example, RIYAD bank are among the Banks that might offer a service at a lower price and more convenient and desirable to clients which will allow them to generate revenue and margin more than market rivals, Competitive advantages include cost, quality and most importantly customer service. Also, the research will address RIYAD bank most powerful services that are aligned with achieving the objectives of the vision of 2030 such as the growth of its economy. First , The main aim of the research is insuring meeting customers expectation, the satisfaction of the services provided to increase the development of the economy, also a will touch on the upcoming merger between the two largest Saudi Banks (RIYAD Bank and NCB ) and its positive impacts on the economy and customers .One of the objectives of the research is addressing the importance of Digitization in the banking sector especially in Saudi Arabian banks and its relationship with attracting more customers, ensure their satisfaction with the services provided and the quality of the services. Finally, a comparison between RIYAD Bank and JPMorgan Chase bank to understand customer behavior and choice and preference. The data collection will include a questioner and a survey to employees, clients to support findings. The current research will be presented in various sections including introduction, literature review, methodology, data collection, and analysis, as well as discussion and conclusion.
Statement of the Problem
Currently, many banks in Saudi Arabia have incorporated digitization in improving service delivery to its customers. This has been greatly influenced by the battle by all the banking institutions to gain the competitive advantage of each other in the provision of services to the growing customer base in the Kingdom. The Saudi government through the National Plan for Telecommunication and IT which was sanctioned in 2007, as well as the National Transformation Program in Vision 2030, have supported the transformation of banking transactions in the nation to digital or e-transactions (Parameswar, Dhir, & Dhir, 2017). This provision has made banking to millions of Saudis seamless and convenient in their day to day transactions activities. Also, several banks in the nation have resulted to merge with other banks such as SABB and Al-AWWAL merger in a move to expand their customer base and influence in the provision of services to more customers (Parameswar, Dhir, & Dhir, 2017). In this case, it is vital to study the importance of mergers and digitization and their competitive advantage to the provision of services to customers and the growth of the nation's economy aligned with achieving the Saudi’s vision 2030 of a thriving economy.
Purpose of the Study
The purpose of this study is to investigate the benefits of digitization in banking and its competitive advantages in the provision of improved services and products to its customers. It will also talk about the impacts of the upcoming merger between Riyadh Bank and NCB bank in Saudi Arabia and its competitive advantages and influence in the economic growth of the Kingdom. The study will also examine the challenges emerging in the process of implementing digitization in the banking systems in the Kingdom. In this case, varied factors will be explored that facilitate digitization in the banking systems in Saudi Arabia to come up with the better provision of convenient and quality services to the customers. Approaches in the process of transforming the country with the implementation of e-government. In this project, the way of digitization and mergers will be explored in the banking sector, which are important in increasing the competitive advantage of an organization in the delivery and access of services to its customers. In addition, available data and information will be used in the project to guide in highlighting the factors that enable or hinder the implementation of digitization and mergers in the banking sector in the Saudi Arabia.
Research Question/Hypothesis
To realize the main objective of the study, its crystalized in the following questions
· To determine the importance of competitive advantages of RIYAD and NCB Bank among other banks.
· To find the approach of the Saudi Arabian citizens concerning the implementation of digital banking?
· To analyze the digitization factor in improving the competitive advantage of a banking institution in the competitive market?
· To analyze the digitization factor in improving the service delivery to customers in Saudi Arabia?
· To Find that digital banking can improve and aid in the growth of the economy of Saudi Arabia.
· To analyze the implications of the merger between Riyadh and NCB to the economy of Saudi Arabia.
Literature Review
Competitive advantage in banking is a far-reaching conception that transacts or operate with the business engineering process (BRP) to put a banking business ahead of other banking competitors in that nation. Competitive advantage usually addresses what the bank has in store that will enable it to attain an advantage over other banks in a competitive market (Noe, et al., 2017). Mechanisms in the operation of the organization such as strategic organization and planning, competitive intellect, corporate social accountability, modernization, and creativeness are important drivers in ensuring that RIYAD Bank gets a competitive advantage over other banks. All these constructs are aimed at improving service delivery to the customers and offer products that will satisfy its consumers (Noe, et al., 2017). Since customers are the core center of any banking operations, ensuring that they are offered quality products and services to their satisfaction will greatly improve the competitiveness of RIYAD BANK.
Digitization is one constructs in the modern banking systems that have led to the increased competitive advantage of any bank that has adopted it. Digitization in banking has led to the conversion of data and information into a digital set-up through the adoption and implementation technology. In Saudi Arabia, for instance, RIYAD bank have embraced digitalization in providing improved services to their customers (Chahal, & Bakshi, 2015). This move has provided customers with ease and convenience which has enabled them to save time when banking. Digitalization has led to reduced human error in the banking world consequently, building customer loyalty. Banks which has adopted digitization thus, have an increased competitive advantage over those still using outdated banking systems and procedures (Chahal, & Bakshi, 2015). Also, some banks have resulted in the merger with other banks to help them increase their competitive advantage in the competitive market. For instance, there are ongoing talks for a merger between Riyadh Bank and NCB, which are two of the largest banking organization in Saudi Arabia. The Merger between the two banks will give a huge competitive advantage over other banks in the nation as it will increase their assets and influence in the Saudi's markets.
Methodology
The research will adopt the the analytical descriptive approach, which aims to study the customer preference and quantitative expression. The approach will investigate the manifestation of the different aspects of the core banking services to do the analysis.
Research Design
The researcher relied on two main sources of information:
Secondary Sources: The research will be focused on a quantitative research method of the secondary data sources, which are related to sampling of inclusive participation of data, randomly sample of participants of E-banking services users and service providers dealt with the topic of study, research and reading in different Internet sites.
Primary Sources: To collect the preliminary data to address the analytical aspects of the research topic through the pilot research, questionnaire as a research tools specially designed for this purpose.
Sampling
The study will be entitled for all employees and customers using the digital banking services. The sample will cover all-inclusive participation of data, randomly sample participants of E-banking services users and service providers.
Instrumentation (Survey)
The survey will be utilized as the main source, also a primary pilot research will be conducted before carrying out the final survey.
A questionnaire (close-choice) will be utilized in collecting the data from the target population which is 10% of the population.
Data Collection and Analysis Procedures
The analysis will be done on through statistical data (SPSS) tool to calculate ratio which will be collected from participants including customers, employees from RIYAD Bank. Tables will be created for the responses obtained for each question. The research will be done based on the relationship between the findings and the study hypothesis.
Discussion
The findings will be used to assess the importance of Digitization in improving the service delivery to customers and aiding in the growth of the economy of Saudi Arabia. As well as, the fact that digitization can improve the competitive advantage of RIYAD Bank in the competitive market. In addition, the study will examine the implication and advantages of the merger between RIYAD and NCB Bank to the economy of Saudi Arabia aligned with achieving the goals of Saudi’s Vision 2030 transformation program.
References:
Abualsauod, E. H., & Othman, A. M. (2019). A Study of the Effects of Online Banking Quality Gaps on Customers’ Perception in Saudi Arabia. Journal of King Saud University-Engineering Sciences.
Alabdan, R., & Callen, J. (2016). THE FLOW OF KNOWLEDGE MANAGEMENT IN THE BANKING INDUSTRY IN THE KINGDOM OF SAUDI ARABIA: HOFSTEDE ANALYSIS OF THE CULTURAL CONSTRAINTS. Issues in Information Systems, 17(1).
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Chahal, H., & Bakshi, P. (2015). Examining intellectual capital and competitive advantage relationship: Role of innovation and organizational learning. International Journal of Bank Marketing, 33(3), 376-399.
Lone, F. A., Aldawood, E. M., & Bhat, U. R. (2017). Comparative analysis of customer satisfaction towards Islamic and conventional banking: an empirical study from Saudi Arabia. International Review of Management and Marketing, 7(1), 273-280.
Morales, D. T., & Trinidad, F. L. (2019). Digitization of Mortgage Banking among Selected Universal Banks in the Philippines: Towards a Model of Acceptance of Digital Mortgage Service. Review of Integrative Business and Economics Research, 8, 401-411.
Noe, R. A., Hollenbeck, J. R., Gerhart, B., & Wright, P. M. (2017). Human resource management: Gaining a competitive advantage. New York, NY: McGraw-Hill Education.
Parameswar, N., Dhir, S., & Dhir, S. (2017). Banking on innovation, innovation in banking at ICICI bank. Global Business and Organizational Excellence, 36(2), 6-16.
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