It's easy to get frustrated with banks in the UAE. Indeed, many people are. In fact, if you live in the UAE, it would be easy to believe, on the basis of daily conversation, that everyone is. But are we being fair on them? Do we notice the service they provide only when something goes wrong?

Here, Lester Wynne-Jones, HSBC's CEO for Abu Dhabi and Al Ain, takes the time to explain to Commerce how exactly HSBC is trying to make its customers happy. Afterall, there should be a lot of happiness to go around: in the first six month's of this year HSBC made nearly $1billion in the Middle East.... 

Do you think most customers in the UAE are satisfied with the service they receive from their bank?
Customer service is very much at the heart of everything we do. But we don't provide the same level of service to every customer. Here in Abu Dhabi, we have Global Banking customers, Private Banking customers, our Premier customers and so on.

How many customers do you have?
We wouldn't normally tell you what our total number of customers is.

One of your staff, with whom I was recently in contact, said you have half a million customers in the UAE. Is that correct?
It depends how you define customer. So a customer could be someone with a credit card or an account. I mean, we are significant.

So does half a million sound about right, if you add together people with bank accounts and credit cards?
I wouldn't necessarily have said that it is right. Not every credit card customer will have a bank account. So it would be potentially misleading...

If you added them together, would it be right?
No, it wouldn't be right.

What is the reason for the secrecy?
It is just that we don't generally publish how many customers we have. We wouldn't ordinarily tell you how many customers we have.

Why?
Just because it is commercially sensitive information. We wouldn't normally tell you how many customers we have. We do know.

So would you say in general you think people are happy with the service they are receiving?
We track our service in terms of customer recommendations, we do satisfaction surveys, we do mystery shopping, so we use almost every technique you can possibly imagine to measure our customer service.
What I would say to you is that, like many things, there are growing pains here. We, for example, only have one branch in Abu Dhabi, but we would like to have more. So we have a lot of customers operating in one physical space. But in this building we are spending considerable money to take a whole additional floor, so it will improve our facilities.

There have been surveys undertaken recently about banking in the UAE. One (Arabian Business) found that 80 percent of customers were very unhappy with the service they are receiving, and the other (AT Kearney), found 90 percent were very unhappy. What is your response to that?
There are a couple of things that are interesting, because those surveys look across a multitude of things and services. One of the things that we do have here of course is our account opening procedures do require people to get visas to operate banking accounts. They do need to be seen personally, all their information needs to be verified, and that is a process that is slightly slower than it is in some other countries.

Why do you think so many people here think banking compares unfavourably with banking elsewhere in the world?
I think there's maybe a couple of things... I think maybe there is a convenience issue. We have been opening outlets in shopping malls to improve our accessibility. Our opening hours are not necessarily the same as they are in many countries where people have come from, but again that is something that we keep under constant review. And certainly what we call our customer service units - such as the one at Mall of the Emirates which is open until 10pm, six days a week - are normally open till 8pm. I think such is the growth going on in the country that wherever you have got to travel, to physically move, I think that is something that causes people an issue no matter where they are going. Car parking, as well. So I think there are some general factors that affect banking and perception of banking. What I think is important is the level of service people receive when we see them.

Why do banks here give such easy and abundant credit to people on relatively low incomes? For example, employees on 16k a month are often offered AED250k.
I can't comment on what other banks do. What I can tell you is that from our point of view, our lending criteria and everything we do conforms to our own lending guidelines.

And are those guidelines the same internationally?
Erm, what we have are international principles that we apply in every country. So that depends on the economics of any particular country. So we have the personal information, we have scorecards that have a number of factors that go into them that determine how much the bank is prepared to lend. What there is of course is an upper level cap of 250,000dhs, which is a Central Bank guideline and regulation. So basic information determines how much can be lent to a customer.

That is very different to the UK, for example. You would never be able to get your hands on that sort of cash, on that sort of salary, with such ease, would you?
I think it depends on your history and your length of time with the bank, and what your credit status is. One thing you have to bear in mind here is that, at the moment, there is no credit bureau in the UAE.

More and more we see in the media here that personal debt is a serious and widespread problem. How bad do you think the problem is, and what percentage of blame do you think banks here must shoulder for giving credit too easily?
Well, I think when you look at the availability of credit, it is driven by economic conditions. So you have a large number of people who are new to this country, and when they come in they have credit needs. It is very common that they want a credit card for purchases; they may want to take out a personal loan or an overdraft to pay their rent. They may want a car, in which case they may want to lease or finance a car. So you would naturally expect that to happen. And that is why I think that happens.

What about the people who run up debt on fifteen credit cards. Don't the banks make it too easy to get those cards?
We ask people for their information. We look at every available bit of information that we can. But it is up to individuals. And obviously any individual who gets into trouble in terms of falling behind repayment... we always try to help people and to understand.

If you get yourself into debt here, you can very quickly end up in prison can't you?
It depends what you mean by "getting into debt."

Ok, I don't mean borrowing. I mean bouncing a cheque, for example.
You have to bear in mind that a cheque is a promisary note, given on the basis that money is in the account to pay it. In extreme circumstances, that is something that will happen (going to prison). You know, it is not something that is happening on a day-to-day basis.

What measures do you have in place to track down people who "skip" the country having run up large debts?
You have to define what you mean by someone "skipping."

Ok. Someone who takes all loans offered, runs up an overdraft, maxes 15 credit cards, and then gets on a plane with the intention of never coming back.
Let me put it in a slightly different way. One of the things that happens is someone might lose their job and their visa, forcing them to return to their country without paying their outstanding debts. It can be done deliberately, or they might be forced to do it. That is one form of skip. Another form of skip is people taking extended breaks, for various legitimate reasons, but it looks like they've skipped. Then, there are the other people who do it deliberately. It is very difficult to predict if someone will or won't do this. Where HSBC is quite fortunate is that we are in 83 countries around the world so it does enable us through our affiliates in other countries to be able to trace people and try to get debts repaid.

How much of a problem is skipping?
The best way to define it is to say it is an event that happens. You can't pretend it doesn't. It is impossible to run a credit card business or personal loan business and to have some losses to this type of thing. Really what is important is how you deal with it, and it becomes part of the cost.

And you are insured against it?
No, not necessarily insured against it. All you can do is mitigate against it as much as possible.

Can you tell me how much money HSBC is currently loaning in the UAE?
We wouldn't say what that was.

The Department of Planning and Economy recently issued a statement saying: "The combination of easy loans in addition to advertising and media propaganda have all combined to plunge consumers into a quagmire of spending spree." That seems to be putting some blame on the banks. What is your response to that?
Responsible lending is the thing that is important. I mean that is the stance that we adopt whatever country we are in. We are not here just to try to give someone the maximum amount of loan as is possible. It is all responsible lending. And those are the principles by which we advance money to people. The same is true for credit card limits. We don't just give people the maximum amount of limit. We look very carefully at the limits that are given, and over a period of time obviously it enables us to see their ability to service the debt.

Well, let's talk about credit cards. When I arrived, I asked for one (from HSBC). I received three. Then, after twelve months I saw a 400dhs charge for each one. Now, if you do have something like half a million customers, and even if each one only has one credit card, then the charges alone are generating in the region of $60m a year for HSBC.
A lot of the credit cards are provided as part of a package and so there is no fee.

What does the credit card fee go towards? What does the money pay for?
What do you mean?

What do the charges pay for? If you're charging, you must need the money for something. What is the money used for?
The charges raised by a bank, whatever income it sets off, is set against the running of the bank. It's not fair to say 'it's this against this,' you know, and matching it up directly.

Many customers would think that the interest they are paying on credit card borrowing would be servicing the loan?
If you pay off your credit card in full then you are not paying any charges. And there are many credit cards available, some without an annual fee, some with an annual fee. Some have slightly different benefits that go with them.

Without wanting to labour this, what is the reason you can't say what the credit card charge is used for?
I think you are trying to relate one thing directly to another. I just don't think it is logical. You know, when it comes to price setting, it is done on the basis of many, many things. Customer research, market, costs of being in the market. You mentioned skips, there's general running costs, all those factors go in to prices. And clearly, if the price is too high, customers will choose another option. There are 47 or 48 banks here. There is significant choice.

How regulated is banking here in comparison with other places you have worked?
Erm, I think we get very clear guidelines here, through the Central Bank, on many things. I think the factors here that many people see are just because the Middle East is growing so quickly and so rapidly that that is just a factor across all industries. I think on many things we are given very clear guidelines.

Would you say banking here is as regulated as it is in the UK?
Let me put that in perspective for HSBC, because we are a Jersey incorporated company, so we are regulated not only by Central Bank here in the UAE, but also by the Jersey Financial Services Authority as well.

So you are saying HSBC is just as regulated here in the UAE as it is in the UK?
Absolutely. You can almost look at them on a like-for-like basis. That for us is very good. At HSBC we comply with the international standards that we employ across our entire group.

Here's a quote from Dave Duncan in Dubai: "I'm currently with a mediocre service international bank and decided to move my business to another global bank in Dubai one I use in my home country. I am absolutely amazed at how this bank can function with its incompetence and how the performance can be so different from home." What is your response to that?
I think with that you have to know what it was that they went through that was or wasn't more complicated than it was back home.

Perhaps he dealt with a call centre and ordered a cheque book that never turned up, or requested a money transfer that never happened...
One of the things that we do hear from customers is as much to do with convenience as anything else. For example, we are in the heart of Abu Dhabi, and there is plenty of car parking space around, but it is often difficult, and when it is 47 degrees... it can make it quite difficult. I absolutely agree. But banks here are open six days a week; in other countries they are only open five days a week. So accessibility can be a frustration. We are looking to provide solutions to that by putting customer service centres in accessible places.

© Commerce 2008

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