‘UAE consumer banking demands changing’
The photo has been used for illustrative purposes.
The expectations of consumers across the United Arab Emirates in the banking sector is rapidly evolving, even more so with the pervasiveness of the COVID-19 crisis, according to new research announced on Monday by Boston Consulting Group (BCG).
BCG’s surveyed over 2,000 respondents in the UAE to understand the changing consumer sentiment and behavior in banking. The research found that 76 per cent of respondents indicated the interest to switch banks and 70 per cent actively search for new bank offers.
“The changes we have witnessed in our research on customer behavior can be linked to the current pandemic,” said Godfrey Sullivan, Managing Director and Head of Financial Institutions UAE, BCG. “Customers’ are experiencing a new reality, relying on conducting day-to-day activities remotely. When they face challenges in the current digital capabilities offered by banks or reduction in credit lines, both of which are becoming increasingly important to them in the current circumstances, they will naturally start to look for service providers who can better cater to their needs.”
The research also showed that 87 per cent of respondents would be willing to open an account with a branchless digital-only bank. This correlates with BCG’s global benchmark, which saw more than 53 per cent of UAE banking customers increasing their mobile app usage for banking during the pandemic, and over 50 per cent who enrolled in digital banking for the first time as a result of the crisis.
“UAE’s banking customers’ have a strong appetite for digital banks, and we see more growth in the demand of digital products during the pandemic,” said Mohammad Khan, Partner, BCG. “We believe that when an end-to-end digital banking solution, such as those found in Europe, is introduced, customers in the UAE will make the concerted effort to fully transition to a digitally enabled banking experience.”
Further, BCG’s research showed that 63 per cent of respondents expressed that they struggle to identify any differentiation across banks and their propositions. At present, top banks in the UAE still have a stable customer base, and 50 per cent of higher-income customers have been with the same bank for five years or more, however, it is vital to strategize for the inevitable change of customer demands.
