Identification of the Factors involved in Non-development of Private Banking in Iran
Purpose: The private banking business has been practiced by Iranian banks over the past 10 years. The products of wealth management, constituting the main core of this business, have not developed during the 10-year period, and the commission income generation is equal to 0 in almost all banks. The purpose of the present study is to identify the factors involved in non-development of private banking in Iran. Method: The present study is a qualitative study in terms of purpose, and it has been conducted using the theme analysis. The data provided by the present study were obtained through interviewing the bank managers involved in private banking in the private banks and the theme analysis method has been used to code and answer the research questions. Findings: According to the analysis of the research data, the factors involved in undeveloped private banking can be divided into two groups, namely the factors relating to the incorrect supply by the banks consisting of 9 secondary factors including the change in the existential philosophy of private banking in Iran, legal obstacles, non-development of the financial tools and markets, incomplete understanding of the customers’ needs, etc. Also, the factors relating to the lack of customers demand for private banking consist of 3 secondary factors including customer’s reluctance to be recognized as a rich person, customer’s reluctance to make risky investments in Iran and the greater customers’ ability to manage the wealth in relation to the banks. Conclusion: The extent of Iranian banks control over all factors involved in the non-development of private banking is low except for two items, namely “incomplete understanding of the customers’ needs” and “structural weakness and weakness in setting goals in business model”. These two items completely depend on other factors including all demand factors and other supply factors to affect the development of private banking. Therefore, in the present political and economic conditions of Iran, there is no possibility of real improvement in the private banking conditions and development of the products of wealth management by the banks.