UAE banks fail consumers – cashy study
- 20% think about voting with feet and leaving main bank
- Poor service, hidden charges and high interest rates top three grievances
- Almost 40% cancel credit cards amid dissatisfaction
A FIFTH of banking customers in the UAE are considering terminating their relationship with their main bank, amid widespread dissatisfaction and a host of common grievances, a study by cashy, the Arab world’s first dedicated personal finance website, and YouGov Siraj, has shown.
High services charges are the most cited reason for people thinking about voting with their feet and taking their business elsewhere, with 47% of respondents saying that is one of the reasons they are considering leaving their main bank. A lack of importance given to customers (42%), poor response to customer complaints (40%) and a lot of hidden charges and fees (37%) are the other main reasons.
A total 18% of the 2,788 people questioned for the study said they are ‘very dissatisfied’ or ‘dissatisfied’ with their main bank. Half of respondents said they would not recommend their bank to a friend or colleague, with just 20% being likely to do so.
Nima Abu-Wardeh, founder of cashy, said: “Banks in the UAE are failing consumers. There is a catalogue of complaints against the companies that provide our current accounts, credit cards and savings products. Consumers are becoming more financially astute and more demanding in what they expect."
The top five grievances people faced when transacting with their main bank in the past year are: delay in answer a phone call (28%); delay in resolving the problem (24%); high service charges and unprofessional customer services (both 22%); hidden charges (19%) and high interest rates on banking services (18%).
“UAE consumers are behaving differently post recession; it appears to have made them choosier and they’re no longer willing to take poor service. They tell us they are prepared to vote with their feet. The survey suggests Banks would do well to focus on really great customer service, which starts and ends with listening,” she said.
Dubai Islamic Bank and HSBC Middle East are the two most used banks in the UAE, with 21% of respondents saying they used these banks for some form of financial product or service.
The study also highlighted what people are looking for in a bank. Although 58% said they chose their main bank because it was a company requirement that their salary was transferred into an account with that bank, people would prefer to select their bank based on other criteria. Around 70% said it is ‘very important’ to use a bank they could trust, while 65% want a bank that is transparent in its dealings. Some 63% of respondents said knowledgeable and professional staff, a bank that makes things simple and a bank with a widespread network of branches and ATMs are very important factors. Prompt service is important for 62% of people.
Credit card providers fared little better than current account providers. More than one-third (38%) of people have cancelled a credit card in the past 12 months. High interest rates (40%) and superfluous charges (37%) are the main reasons cited for cancelling cards.
‘Free for life’ option (62%), annual fee waiver (41%) and cashback facility (37%) are the top three features that are most likely to make people switch from one credit card to another.
The study looked into other areas, including loans and Islamic banking (see attached slide show).
cashy is proving an invaluable resource to consumers in the UAE since it went live in July in both English and Arabic. The website, which is powered by Zeedna – a social media publishing platform developed by Baraka Ventures to support the rapid expansion of online communities – allows consumers to compare credit cards, current accounts and savings products from financial services providers in the Arab world. Comparison tables on other product areas will be added over time.
The cashy community has the ability to ask a panel of experts questions about their personal finances, and users can try to help each other by adding their own answers. The site also features independent editorial aimed at helping consumers taking control of their financial future, contributed by a panel of journalists and experts.
YouGov Siraj interviewed 2,788 people in the UAE between 7 April, 2010 and 2 May, 2010.
Pic credit: Maggie Smith/ FreeDigitalPhotos.net
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