Almost half of UAE residents surveyed by compareit4me.com, a UAE-based finance comparison website, said they choose to save their money in bank accounts outside the country.
More than 48 percent of respondents of the annual survey, which seeks to measure consumer finance habits, claimed they are more confident with banking systems in their home countries.
Jon Richards, CEO of compareit4me.com, said the results indicated that UAE financial institutions may be missing out on an opportunity and need to do more to keep residents’ savings onshore.
“When you look at the results, a significant number or 65.5 percent of the survey respondents claimed to be saving between 10-50 percent of their salary every month.
"With millions of dirhams leaving the country every year, there appears to be huge potential for UAE banks to attract regular savers,” Richards added.
He said banks need to work with the UAE Central Bank to look at initiatives that will incentivise expats workers to keep money earned here in the country.
According to the survey, many expats feel more comfortable saving with banks in their home country as they understand the system and feel comfortable with banking regulations. Accounts in the Isle of Man are protected by the Compensation of Depositor Regulations.
Damian Hitchen, sales director – Middle East & Asia of Swissquote Bank, said: “Expatriates in MENA are increasingly looking for safe, easy-to-use and flexible offshore banking and investment providers. Based on the growth of our Expat account alone in 2014 we see a big demand for assets held outside the region, giving them a centralised account for their global savings that are accessible round the clock.”
Despite the large number of residents sending money abroad, renewed economic confidence in recent years has seen UAE banks flush with liquidity. According to the UAE Central Bank, total bank deposits of UAE banks climbed by 1.4 percent year-on-year in June to AED1.4 trillion ($381 billion).
Richards added: “Instituting proactive financial service reforms will be a critical step towards encouraging expats to keep their money in UAE banks. Providing transparent mechanisms that protect depositors will undoubtedly increase deposits with local banks giving them greater access to retail funds.
"This will lead to cheaper forms of credit while strengthening the resiliency of UAE’s financial sector during times of crisis,” added Richards.For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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