There is no such thing as a loyal customer for life. With the right offers, residents are willing to move from one bank to the other... just make sure to have the best offers. Image Credit: Ahmed Ramzan/Gulf News Archive

Dubai: Majority of bank customers in the UAE are willing to switch to banks that meet their needs according to a new sturdy by Boston Consulting Group (BCG). The expectations of consumers across the UAE in the banking sector is rapidly evolving, even more so with the pervasiveness of the COVID-19 crisis.

BCG’s surveyed over 2,000 respondents to understand the changing consumer sentiment for banking services. It found 76 per cent of respondents indicated the interest to switch banks and 70 per cent actively search for new bank offers.

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“The changes we have witnessed in our research on customer behavior can be linked to the current pandemic,” said Godfrey Sullivan, Managing Director and Head of Financial Institutions UAE, BCG. “Customers’ are experiencing a new reality, relying on conducting day-to-day activities remotely.

"When they face challenges in the current digital capabilities offered by banks or reduction in credit lines, both of which are becoming increasingly important to them in the current circumstances, they will naturally start to look for service providers who can better cater to their needs.”

Digital inroads

The research also showed that 87 per cent of respondents would be willing to open an account with a branchless digital-only bank. This correlates with BCG’s global benchmark, which saw more than 53 per cent of UAE banking customers increasing their mobile app usage for banking during the pandemic, and over 50 per cent for digital banking for the first time as a result of the crisis.

Mohammad Khan, Partner at BCG said, “We believe that when an end-to-end digital banking solution, such as those found in Europe, is introduced, customers in the UAE will make the concerted effort to fully transition to a digitally enabled banking experience.”

And 63 per cent of respondents expressed the view that they struggle to identify any differentiation across banks and their propositions. At present, top banks in the UAE still have a stable customer base, and 50 per cent of higher-income customers have been with the same bank for five years or more. However, it is vital to strategize for the inevitable change of customer demands.

“The ever-changing customer preferences that we are witnessing in banking as a result of the pandemic mean banks must explore new avenues to upgrade their services across channels – which includes investing in digital and also in creating an omnichannel experience to meet customer needs,” said Sullivan. “There is great opportunity for banks to disrupt the market and taking immediate actions to meet the evolving customer demands will be vital in business retention and the road ahead.”