Banking In The U.A.E.: Trapped In The Stone Age?

U.A.E. banks are still catching up to speed on contemporary banking services as more than half of U.A.E. residents reported a desire to switch banks due to poor customer services.

A new iProspect and Arabian Business study announced that 48 percent of U.A.E. customers have complained about high transactions fees and dissatisfactory customer service as top reasons for wanting to switch banks

But if they are unhappy, then why aren’t they making the switch?

The process is more complicated than just picking up the phone and requesting to withdraw funds.

The study revealed that banking administration was very complicated and prevented many consumers from making the effort. Fifty-three percent of customers said they have thought about switching to a better bank, but 36 percent said a tediously long paperwork process stopped them from making any changes.

Then there are the 24 percent that reported they didn’t believe there were better banking options available for them. While many did not approve of the high transactions fees, a contrasting 40 percent said they thought the charges were reasonable and fair.

The study also suggested that U.A.E retail banks may be having trouble keeping promises and staying consistent with marketing messages.

Fredrik Schauman, managing director of iProspect in MENA, said, “There is a massive inconsistency in the online marketing promise versus the delivery of the marketed service.”

Customers are exposed to financial advertising that gives them unrealistic expectations about bank products and services. A large portion of customer dissatisfaction can be attributed to the unfulfilled expectations. Banks are augmenting reality by marketing impractical promises that fall through.

“If banks gave improbably marketing promises that were followed up with poor service delivery, then as the study suggests, consumers will look to move on,” Schauman explained.

Moving away from customer complaints, the study also indicated that Internet and mobile banking showed a growing demand. While most U.A.E. customers still prefer ATMs for everyday banking transactions, almost 20 percent said they were interested in mobile banking. ATMs prevailed, but the number of consumers that showed a desire for mobile banking exceeded those who still chose to go to local branches for service.

Anil Bhoyrul, editor of Arabian Business, added, “The study proves the use of mobile financial services is seen to be prevalent amongst respondents. But while the use of mobile banking in the U.A.E. has increased over the years, the report indicates that many customers remain doubtful of the benefit of mobile banking and the level of security associated with the technology.”

Lastly, the survey highlighted a desperate need to modernize U.A.E. financial system. The region’s banking system’s still uses ancient paper checks.

Earlier this year, U.A.E.’s Central Banks announced they would be launching a new direct debit system for company pay, but the system wasn’t extended to all sectors. Fifty-six percent of customers reported that they were still being asked to write checks to cover auto loans, mortgages and credit cards.

To read the full story at Arabian Business click here.