If you have horror stories about your banking experience that pepper your dinner conversations or heat up office water-cooler discussions, you are not alone.
One-fifth of bank customers in the UAE are considering leaving their bank and about 40 per cent are cancelling their credit cards following widespread dissatisfaction and grievances, according to a recent survey by personal finance website Cashy and pollster YouGov.
High interest rates, poor service, and hidden charges are the top reasons driving customers away.
Respondents said the main grievances in dealing with their bank are delays in answering phone calls, delays in solving problems and unprofessional customer service.
"What this indicates is that people didn't find it much different when they go to another bank, so what's the point? It's jumping out of the pan and into the fire," Nima Abu Wardeh, Founder and CEO of Cashy, told Gulf News.
She was surprised that only 20 per cent wanted to leave their banks. "A function of that is ‘where do I go?' Other banks are not better. It's a nightmare."
Banks are operating in a level playing field here because there are few differences in products or rates. Only customer service gives banks that added edge, she said.
More money-conscious
The question is why are more people complaining about customer service, voicing dissatisfaction and leaving their banks?
The financial crisis has made customers increasingly money-conscious, industry analysts agree.
Consumers have become pickier about their banking, careful about spending money, and their expectations of banks changed, according to Akash Pal, AC Nielsen's Executive Director of Consumer Research for Middle East and Pakistan.
"They want to be heard more and told more," he said.
Before the crisis, banks had a "take it or leave it" attitude: Sales were good, customers got good deals, and there were few complaints. Banks became more product rather than customer focused, he explained.
Post-crisis banks are not listening to their customers. Call centres lack the ability to listen to and resolve complaints, he said. They do not have the ability to deal with clients highly stressed because of their debts.
Banks are also failing to explain to customers their banking products clearly, he said. There is no transparency on charges or rates which sometimes change overnight without informing customers, Pal said. Clients often fail to read the fine print and need banks to inform them better.
Customers felt the recession pinch and money talks so they are making decisions based on how much they can save and how much money they can get back, said Abu Wardeh.
The economic slowdown has killed customer trust in banks and their transparency, leaving them more suspicious of financial institutions, said Steve Hamilton-Clark, regional CEO of marketing research company TNS Global.
"It is a harder battle for banks to win."
Customer frustrations also arise because banks are bound by strict regulations that force them to be process driven and the protocol delays solving problems efficiently, he added.
Many banks do not have a proper service recovery programme in place, leaving people to complain vocally or to the media, he said.
The trend among banks now is to focus on high-net worth individuals (HNI) so regular customers get less attention, according to Pal.
It is also a matter of limited resources. With slow hiring in the last two years there are simply not enough bank employees to deal with the large volume of clients, said Hamilton-Clark.
Arcane Consulting, a mystery shopping company that evaluates banks among others, said it would give call centres a mere 20 out of 100.
Automated responses, long delays, and no operator are among the reasons for low scores.
"It's frustrating, all you want to do is ask them a simple question and get on with your life," said CEO Cherian Kuruvilla.
"Every bank is the same, it looks good from the outside but when you deal with them you realise it's worse than the last. Banks in the UAE are the same, they want to squeeze money out of you."
Credit card providers fared as badly as account providers, the survey showed. More than a third of people cancelled their credit cards because of customer service abuses, high interest rates, and extra charges.
"My feeling is that people thought ‘oh my god, I got into so much trouble with credit cards, I'm going to cut them in half, pay my balance and never do that again," said Abu Wardeh.
This indicates a problem, not with debt itself, but with people's ability to manage debt, she said.
Banks are part of that problem because people bought products they did not understand.
"Both parties are responsible to understand the terms and conditions," she said.
Poor customer service is driving more people to voice their complaints on social media platforms—which could turn into a real reputation-buster for banks, finance analysts say.
"It's the eternal water-cooler moment…We just want to be treated better, don't we?" said Abu Wardeh. "This is not new, but because times are bad people are not letting things go so much."
It's not that people did not complain before, but now they have more platforms to vent their frustrations, said Pal. And action has been taken as a result.
"These days one tweet or a clever video can damage a company's share prices. One negative comment can have a huge ripple effect."
Banks are naturally fearful of this social media animal because they don't understand it and can't control it but they're missing the point: This is a platform to listen to and engage customers and the community, she Abu Wardeh.
Though they cannot control the online stream of complaints, banks can improve their customer service and abandon their take it or leave it mentality.
"It's about the person and the personal and that's gone," she said. Banks are worried about losing customers due to complaints about poor services and realise that they need to step up their game, they say.
"Absolutely, customers and our relationship with them is our most valuable asset and we do not want to give a reason to our customers to leave us," said Mohammad Hadi, Head of Customer Experience at HSBC UAE, in an email to Gulf News.
"As we all know, it is very expensive to acquire a new customer and there is a real value in keeping existing customers happy."
New initiatives
HSBC itself found its current levels of customer experience unsatisfactory according to results of their internal surveys, Hadi said.
They have a few initiatives lined up to keep customers happy: increasing the number of personnel in the Customer Service Unit, providing products that clients need (not what the bank thinks they need), providing easy to use products, training employees, improving internet banking, and investing in direct banking channels, he said.
"HSBC is a well-respected and trusted global brand and this has helped us greatly, but now it's our job to maintain that brand image through our customer touch points," he added.
He added that fees are transparent and that growing in the Middle East is a challenge due to local regulations.
Banks acknowledge that they need to improve as an industry and are naturally concerned if they are not seen as good enough, said Gavin Sanderson, Head of Distribution at Mashreq Bank. The biggest banks see the most complaints because they deal with a larger section of the population, he noted.
Often customer dissatisfaction is triggered by being in a stressful financial situation, he said. But they must speak to the banks before they get into trouble so the banks can help them, he emphasised.
Banks must focus on developing long- term relationships rather than focus on easy borrowing and lending, he added.
Are you satisfied with your bank’s services? What can be done to improve the service standards in the banking sector? Tell us at readers@gulfnews.com
