Through expensive newspaper, television and radio advertisements, Saudi banks seek to attract customers by promising them a great number of services. These services, however, seem to benefit not the majority of customers as expected but only those with fat wallets.
Banks certainly provide services but not to the majority whose balance seldom exceeds a few thousand riyals. The services are reserved for people whose bank accounts hold hundreds of thousands or millions of riyals.
I don’t know exactly what kind of services our banks promise the public. But judging the letters I receive, it seems that many of those who approach the banks for the first time in order to open an account are subjected to a frustrating experience and face a number of obstacles.
A reader complained that those trying to open a bank account for the first time will be shocked to learn that doing so is impossible unless the person had thousands of riyals. The amount is far beyond the ability of most normal people. The letter went on to point out that once the account is opened, the problems are not over. Banks levy high charges for services such as opening stock trading accounts, conducting trading on the Internet or by telephone. To these charges is added any loss incurred by clients as a result of a breakdown of the electronic banking system — for which the customers are in no way responsible. The problem with trading in shares is the absence of local brokerage services which leaves investors with no other alternative than to conduct their business through banks.
The rising appetite of individual investor for stocks — shown by the unprecedented response from the public to recent company IPOs — merits the intervention of regulatory bodies, specifically the Saudi Arabian Monetary Agency, to monitor banks.
The rush to buy shares in companies that offer their shares to the public has shown how banks exercise their influence upon the public. The initial public offering is conducted through selected banks. In the latest IPO, the entire process was conducted by four banks which insisted that any one wishing to buy shares must have a bank account with one of them, thus denying many the opportunity to acquire shares. How can Saudi banks expect to increase customer loyalty and win public confidence if they continue to behave like this?
Investors continue to show increasing interest in shares and mutual funds and this requires access to all services that enable investors to manage their money. SAMA must intervene to ensure that investors have other means available to them instead of being forced to deal through only one.
