Free holidays or good customer service? Which is the better lure to get your custom at the local bank?
It’s a question that can rightly be asked following this week’s rollout of the latest strategies in the ever-present battle of the banks for your hard-earned cash.
The Commercial Bank of Dubai was first cab off the rank with the headline-grabbing offer of free holidays, and a delayed repayment plan, in a bid to get customers aboard.
Never mind that the UAE has one of the highest consumer debt-to-income ratios in the world, the promotion for new personal loan customers and existing customers wanting a loan top-up includes free travel to destinations of their choice and a chance to start repayments next year.
No need to worry about how much money you owe the bank when you’re topping up your tan in The Maldives.
On the same day as news of CBD’s strategy broke, UAE lender United Arab Bank (UAB) unveiled its three-year partnership with Spanish football giant FC Barcelona.
Quizzed about the deal by Arabian Business UAB boss Paul Trowbridge said: “There is a very significant fan club. I think the fan club, which is not connected with the club strictly, has about 500,000 people in the UAE, and that’s an opportunity for us to sort of identify with 500,000 people, many of whom might be our customers, but certainly not all of them.”
When quizzed about deals such as CBD’s approach and free holidays, Trowbridge claimed UAB “just don’t do giveaways” and the bank had a “brand new strategy” to entice new customers. What is this new strategy? “In the last five years we’ve gone from being the smallest bank in the 54 banks in the UAE to one of the mid-sized players. The reason we’ve been able to do that is that we’ve actually offered, we give a very high level of service,” he says.
In the same breath, the bank revealed it was giving away 14 tickets to see FC Barcelona in Spain as part of its new sponsorship agreement. So which is it? There is no doubt the bank is leveraging off the popularity of a global sporting club, and its brand - showing that even the high moral ground is impossible to sustain 100 percent of the time when it comes to the competitive banking world and the need to boost business.
However, there is nothing like getting through to an actual person, not a machine, when calling a bank. Or prompt service when visiting a branch. Less-glamorous, yet more importantly, incentives such as competitive interest rates would also be great.
With the UAE experiencing low credit growth, despite the high consumer debt rate, and companies continuing to deleverage, banks’ margins continue to be squeezed.
Expect to see more holidays, mobile phones, affiliations with sporting clubs and any other initiative to get you over the line.