UAE banks up investments in digital channels to lure customers

A 2013 index by consultant AT Kearney ranked the United Arab Emirates in 17th position for digital banking readiness. The firm stated explicitly that the country did not offer an attractive environment for digital banking but noted that it had strong potential for the future.

Two years later, perceptions are changing rapidly thanks to a push by lenders to digitise in response to customer demand.

According to a recent survey by price comparison website Souqalmal.com, about 27 per cent of residents said that they would recommend their bank to friends and family. This figure was almost double the 15 per cent in 2013 – and an even bigger jump in confidence from the 2012 poll of 11 per cent.

Bankers across the UAE suggest digitisation has been only one part of the process.

“This is an era of customer empowerment. We are seeing customers who are well informed sometimes more than the bankers, they are digitally savvy and banks have to play catch up,” says Emirates NBD Retail Banking and Wealth Management general manager Suvo Sarkar.

“Its very much the customers demanding where they want the bank to be and what time they want the bank to be.”

Banks have also been quick to cash in on UAE customers’ affinity for all things digital through new services, leading to many firsts in the region.

Recently Mashreq bank launched the first automated branch with no staff to man it. The ibranch uses gadgets such as personal computers and touch screens to enable customers to make a payment, open an account, pay utility bills, apply for a loan and much more.

Following this, the bank is also reportedly planning to open four more branches this year across various locations in Dubai.

As smartphone penetration increases, banks are also seeing significant gains in the number of mobile banking customers.

About 81 per cent of Emirates NBD’s transactions are being conducted outside bank branches and 18 per cent of customers are using mobile banking, Sarkar says. A number he expects to double this year.

Meanwhile, Mashreq said that it saw 120 per cent growth in its mobile banking base this year.

“The future of banking lies in the hands of mobile technologies being maximised in providing banking services on the go. With the UAE
being one of world’s highest adaptors of smartphones, mobile banking has seen significant growth,” says Mashreq Electronics and Business Innovation head Aref Al Ramli.

Cashing in on this swing to mobile services, Emirates NBD launched a mobile cheque deposit facility that allows users to deposit a cheque via the bank’s mobile banking app. Through this service, customers can capture the image of the cheque and then upload it via the bank’s mobile app saving them the hassle of a visiting a branch or a cheque deposit machine.

The lender has also introduced a new mobile queuing ticket service that will help customers get a ticket for their banking transactions even before they reach the bank.

Naturally this means heavier investment in digital than ever before.

“We invest heavily at digital space to create a unique digital experience for our customers. In 2014, we have doubled our investment in digital channels and this year we expect 50 per cent growth in digital investment,” says Al Ramli.

Emirates NBD too has grown its digitisation spend by 25 per cent over the last five years, Sarkar adds.

Surely a sign the UAE will be pushing its way up the digital banking ranks.