It will come as a surprise to precisely no-one to find that residents in the UAE don’t, as a whole, have a very high opinion of their banks. Last week, new research from Capgemini and Efma showed that only 29 percent of those questioned in a Customer Experience Index (CEI) survey had anything positive to say about their dealings with local lenders. The country was sixth from bottom in a ranking of 32 countries, a list that was propped up by Hong Kong and Singapore. Saudi Arabia, the only other Gulf country on the list, fared marginally better, with 32 percent having a favourable opinion of their banks.
The real problem, however, is that customer perception of banks in the UAE appears to be getting worse, not better. Of the 80 ‘touchpoints’ used to make up the rankings, the research suggested that customer experience in the country declined in “nearly all…leading to an overall decrease of 27.5 percent in the share of customers with positive experiences”. The UAE was second only to Norway in terms of that decline, year on year.
So what’s wrong with the UAE’s retail banks? Quite a lot, if you read the comments section on the Arabian Business website. The gist of them seem to indicate that users are stuck with the banks they have, simply because they don’t believe the competition is any better. According to a survey we ran last year, in conjunction with iProspect, 53 percent of customers in the UAE have considered switching banks, but 36 percent said they have not switched due to a lengthy paperwork process.
Another 24 percent of those interviewed said they believed there was no better option among UAE banks. The study also showed 48 percent of banking consumers quoted poor customer service and high transaction fees as the main catalysts that would make them switch banks.
All this seems to indicate that there is clearly a hefty mismatch between what customers expect from their banks, and what banks think is appropriate customer service.
I’ve never had a problem with my own bank, but then again I’ve never really had a major problem that the bank has had to help me resolve. But earlier this year, I approached the bank to request a small personal loan with a tenor of one year. This was politely refused – not on the basis of my credit history, but due to the bank’s policy of refusing all personal loan requests from employees of the company I work for. I have to say I found this a bit bizarre. Why do I still get cold calls from my own bank offering me new loans and credit card advances? How many companies and individuals are affected in this way? And finally, surely there must be a better way of gauging whether someone is creditworthy?
Well, there is, of course. The Al Etihad Credit Bureau, which is being launched this year, will finally enable lenders to make accurate decisions based on credit scores. There’s only one snag. Just one of the UAE’s banks – the National Bank of Fujairah – has bothered to submit customer credit data in time for the bureau to actually start operations.
While the UAE Banks Federation rushed out a press release late last week to reiterate its members’ support for the concept, it’s still the case that the country’s lenders have known about the credit bureau for roughly four years. This is hardly good PR for the industry. Sadly, the banks’ lack of action just confirms what most UAE customers already know; that lenders in this country have a long, long way to go to win consumer trust.