Jordan's banks need to prove their worth
Financial institutions, especially banks, have to prove that they are both economically and socially useful to continue to have a place in the market, according to Marcus Bailey, head of regions-Europe, Middle East and Americas corporate affairs at the Standard Chartered Bank.
“Besides their commercial value, they need to have a social purpose such as contributions to support local communities in cooperation with government entities and through consulting with NGOs,” he told The Jordan Times in an interview on Sunday.
“Banks have learned many lessons in various aspects and the coming two years are going to be critical for their survival,” Bailey said. “The next two years will see the greatest changes. After that, the market will witness an era of evolution.”
He expected the number of banks in Jordan to decline saying: “Local banks which have learned about the importance of strong governance or adapted to that, and which have acquired an understanding of the culture will succeed.”
“It is important to do the right thing and to increase customers’ consideration of a bank”, he added, highlighting the importance of ensuring cost-effective policies that are in line with local needs.
Zu’bi Al Zu’bi, chairman of the University of Jordan business management department, shared the idea that banks have to provide social services to the community to establish strong grounds and to remain in business on the long run.
He commended banks’ efforts to reach the community and to ensure sustainability through their various operations, but conceded that their efforts were still much below the desired level.
“So far, banks have failed to actually reach individuals. They have rendered few services to the community to serve their commercial purposes, while they should provide real services, especially since revenues used for corporate responsibility programmes are tax-deductible,” Zu’bi elaborated.
Zu’bi indicated that “until now, local banks’ contribution to community services does not exceed 1 per cent of their revenues which are huge, in the absence of progressive taxes”.
Bailey reiterated that the bank makes use of technical expertise to arrive at real needs, citing Standard Chartered’s mobile eye clinic that was donated to the Royal Medical Services and operated at Princess Basma Hospital in Irbid.
This initiative seeks to reduce Diabetic Retinopathy, a disease which leads to blindness, he pointed out.
He also highlighted the bank’s endeavours to promote “financial literacy”, besides its continued follow-up of its community initiatives.
In terms of fighting financial crime, he said that the bank has strict policies and it would turn down deals that are inappropriate.
The bank observes local besides home-regulations, which are of the United Kingdom, he added.
Bailey was in Jordan on Sunday on a brief visit to check on the corporate social responsibility programmes of the bank, which has branches in Amman, Irbid, Aqaba and Zarqa.
- Why is Jordan's inflation so high? These reasons may surprise you....
- The Middle East's lack of savings: a ticking time bomb?
- How a Middle Eastern bank fought off the global financial crisis and turned around
- The GCC's small businesses need to prepare themselves for bankcruptcy
- Why the World Bank is ill-prepared when it comes to dealing with the Middle East