The global financial crisis has left many bank customers across Central/Eastern Europe and the Middle East feeling financially vulnerable but this does not appear to be the case in the UAE, according to a survey by global market research company Synovate. Only 10% of customers in the UAE consider themselves financially exposed, the second lowest in the survey after Saudi Arabia at 4%. This is in contrast to 36% in Russia, the highest in the region. What's more, only 4% of UAE consumers expect their personal financial situation to worsen in the immediate future.
Synovate interviewed 13,000 bank customers and evaluated 29 international and 211 local banks across 13 countries. The findings also revealed that when they need financial advice, 41% of bank consumers in the UAE prefer to consult family members, while 28% turn to friends and 19% go to banks or financial advisers.
Asked how they would invest a 1 million Euro windfall, 23% of consumers in the UAE would open their own business, while in all the other countries the first preference is to buy a housing property or bigger dwelling to live in - which was the second choice in the UAE, preferred by 15% of consumers. Putting that windfall in time deposits or saving accounts was considered by just 10% of UAE consumers.
The Synovate study revealed that a large majority of consumers across these markets - including three-quarters of UAE consumers - attribute the current financial crisis to the "greed" of Western financial institutions, as well as a lack of regulation and governmental monitoring in developed countries. More than 75% of consumers in the UAE expressed the view that the international crisis has affected the country's economy and local banking sector and will continue to do so.
Although half of UAE consumers trust banks and financial institutions less than they did before the global crisis, 58% still hold positive opinions of local banks, and 47% expressed a positive view about international banks. Interestingly, only 42% of consumers want to see the UAE government bailing out the banking sector using taxpayer money and 39% believe that their savings are no longer safe in a bank.
Customer loyalty in the banking sector in the UAE is the second highest across the survey (after Saudi Arabia), with 58% of customers being strongly loyal to their banks. Customers of Abu Dhabi Islamic Bank, Dubai Islamic Bank and the National Bank of Abu Dhabi are the most loyal in the Emirates.
Mashreq Bank enjoys the highest total awareness in the UAE, with name recognition amongst 96.2% of consumers, marginally ahead of Dubai Islamic Bank, HSBC and Emirates Bank. However, when Synovate measured brand equity - a combination of awareness and the strength of customers' brand relationships - the Dubai Islamic Bank came out on top with brand equity more than double that of second-place Emirates Bank and more than three times that of third-ranking Mashreq Bank.
The survey also revealed that HSBC, Abu Dhabi Islamic Bank and many other banks in the UAE market are losing market share because of their own barriers, the most common of which are long bank queues, inconveniently located branches, high interest rates on loans, and low returns on savings or deposits.
Among other brand image findings, Dubai Islamic, Abu Dhabi Islamic, Sharjah Islamic and Noor Islamic Banks are strongly associated with offering interest-free banking and Islamic banking in compliance with Sharia law. Habib and HSBC are both associated with quality of service while Mashreq Bank is seen as having well organised and efficient branches, well functioning ATMs, and knowledgeable and professional staff.
Clayton Buckley, Synovate's Managing Director for the UAE, Saudi Arabia and Iran, commented: "Given the relatively low percentage of UAE consumers who feel financially exposed, overall optimism for the future and the desire of many people to open their own business, clearly opportunities exist for banks to expand their uptake of products and services even in adverse economic conditions. This said, because banks rank behind family members and friends as preferred sources for financial advice, the first challenge is for financial institutions to build closer personal relationships with their customers."
Buckley continues, "The results suggest that banking is a very competitive sector in the UAE. Although some banks enjoy strong customer loyalty, most still have to go farther in improving their customer experience, maintaining or extending competitive advantage, removing barriers, and enhancing their customers' emotional attachment. Overcoming these challenges will allow financial institutions to strengthen relationships with their banking public and ultimately improve their business performance."
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About the Synovate syndicated banking study
The survey was conducted from October to December 2009, with representative samples of 1,000 banking customers in each of these 13 markets: Russia, Poland, Ukraine, the Slovak Republic, Hungary, the Czech Republic, Greece, Serbia, Bulgaria, Romania, Turkey, the UAE and Saudi Arabia. Reports can be purchased for each of these 13 markets or individual assessments can be produced for banks that were covered by the survey. More information is available from Per-Henrik Karlsson at PerHenrik.Karlsson@synovate.com or +971 4 367 8250.
Contact:
Per-Henrik Karlsson
Business Development Director
971 4-367 8250
PerHenrik.Karlsson@synovate.com
© Press Release 2010
