A report by management consultancy Boston Consulting Group shows that about 55 per cent of UAE residents polled in a survey said they would have no problem switching to a new bank.
Almost 66 percent of bank customers in the UAE are also actively looking for new offers, the research that polled more than 2,000 people in the Emirates this year found.
“In the UAE, we see that most customers have multiple banking relationships, which is understandable when one considers the significant expectations people now have of their banks,” Mohammad Khan, partner at BCG, said.
“Two-thirds of survey respondents proactively search for offerings that provide better value and over half would not be hesitant before opting for a different bank altogether.”
The increase in FinTech companies and an increasingly digital-savvy consumer base have obliged banks globally to invest in digitalization. The Covid-19 pandemic has further hastened the move to digital services as consumers opt for cashless payments and online shopping.
About 69 per cent of banks in Europe, the Middle East and Africa believe they will lose market share within two years unless they make significant progress in their digital transformation, a September report by cloud banking platform Mambu and The Financial Times Focus said.
More than 20 per cent of UAE consumers changed banks within the past 12 months, according to the BCG report. High interest rates, products not meeting personal needs and poor customer service were cited as the top reasons driving attrition among leading banks in the UAE, the report said.
Alternatively, excellent customer service, superb digital experience and strong brand reputation were cited as the main reasons that would compel customers to recommend their banks to friends and family, the BCG research showed.
“With numerous factors behind consumers’ decisions to switch banks, there is unquestionably room for improvement,” Mr Khan said.
“Leading banks offering excellent service via digital have set the latest industry benchmark, and this is something those currently behind should aspire to emulate not only for customer retention and attraction purposes but also for brand development.”
About 88 per cent of customers in the UAE are also now willing to open a digital-only bank account, the BCG study found.