Success Factors of Islamic Banks: An Empirical StudyTable 23: Per Cent of Current Accounts to Total Deposits
BANK 1998 1999 2000 2001 Average
A 16.71 15.82 17.22 18.04 16.95
B 7.48 7.79 11.39 9.93 9.15
C 22.64 20.90 19.01 16.27 19.71
E 25.95 21.25 21.66 20.20 22.26
F --- 1.91 2.45 2.97 2.44
Average 18.20 13.53 14.35 13.48 14.10Another factor which is needed for confidence building is the ability of
the bank in providing integrated high quality services to for all the financial
needs of the clients. Apart from some narrowly specialized banks, expansion
and diversification of the banking services instil confidence in the bank and
build business loyalty of the customers. With expansion and diversification
come speed and effectiveness of services provided to the customers as they
assure them of the bank’s ability to achieve.
Management’s attention to things that many consider small and trivial,
such as dress, cleanliness, smiling, avoiding queue formation, accuracy and
speed in concluding a transaction, should be relentlessly emphasized as some
of the key factors of a bank’s success.
4.3 Efficiency of Investment, Financial Engineering and Marketing
Departments
These three departments should be well equipped, trained and prepared.
The investment department generates revenues for both shareholders and
depositors and it is the one that directly influences the bank’s profitability. It
must be accountable for the task of continuously raising two indices: the
investment index (invested assets to total assets) and the index of earnings to
assets that measures investment return while it is constrained by the two
principles of yield stability and capital preservation.
Additionally, the Investment department needs to adopt a pricing policy
that reflects overall circumstances of the bank, the services it provides to
customers including the unique services of mudarib should be taken into
account.
Another success factor of the Islamic bank lies in its financial engineering
department. This department must always be able to provide a continuous
flow of new instruments, windows and investment contracts that assist the
bank to attract new customers and offer new services. It is evident that the