OK, you are an investor based in the UAE with a growing portfolio of stock holdings. Which platform will you be using - the one from your bank or a pure-play trading portal? Image Credit: Shutterstock

Dubai: Want to buy a trending stock on DFM or ADX? Just open the banking app on your phone…

The leading banks in the UAE – including the new-gen digital-only ones – are upgrading their apps and the services these can offer to tap into the swelling interest to buy and trade stocks among UAE residents.

Some of them are even allowing users to do so on zero commissions – and without having to take their NIN (National Investor Number). All this while offering a compelling enough ‘user experience’ for app users.

In recent weeks, top-notch banks in the UAE have all gone in for updates/upgrades to their consumer apps. The rationale is quite straight-forward: not only do the banks want clients to open the app for meeting their financial needs, they also want them using it to trade in stocks. Whether that’s UAE stocks, overseas ones, or just park funds in mutual funds.

Emirates NBD's X app now offers access to more than 200 mutual funds. And it helps users with remittances too... Image Credit: Shutterstock

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There is no denying that retail investors have been lighting up UAE stock markets in the last two years. Their presence has lighted up the action for the spate of IPOs and the subsequent over-subscriptions. And they have been busy in propelling trades in some of the most active stocks on DFM and ADX, including the stocks of Gulf Navigation, Al Ansari, Union Properties and Amlak, among others.

Yes, the ‘battle’ is on

“Banks are taking the battle with (standalone) stock trading platforms very seriously,” said Suvo Sarkar, founder and CEO of the consultancy 3D Advisory and until recently, a top official at one of the leading banks in the UAE.

“Banks like Emirates NBD, Mashreq and (digital-only) Wio have invested significantly in their mobile apps to enable stock trading across various exchanges, both regional and international. Customers can buy and sell not just stocks, but mutual funds and ETFs (exchange traded funds) at the click of a button - 24x7.

“There are three advantages that banks have over independent trading platforms.

  1. One is that they have a wide base of existing loyal customers.
  2. Two is that the customer funds are already lying in bank accounts, so trading is convenient.
  3. The third is the inherent trust that customers have in their banks – they know their money is safe.

The battle for wealth management is going to be won through user experience

- Suvo Sarkar of 3D Advisory

Plus, if banks can offer a platform to trade at zero commissions, that too can win them favours with clients.”

It’s all in the CX

The recent past has seen multiple local and international trading platforms catching the eye of investors in the UAE. It helped that US stocks and markets was starting on one of their hottest streaks, with the ‘Magnificent 7’ tech stocks leading the way by some distance. Whether it was Robinhood and the whole craze over ‘meme stocks’, investors just wanted to be part of it all.

And then, in the UAE, there was the IPO rush, starting with DEWA in April 2022. The momentum that this set off continues to this day…

All of which adds more retail investors holding stocks than ever before. In 2023 alone, there were 57,000 new sign ups with DFM.

“The base has been set – and all that UAE banks had to do was make a grab for the trading action,” said a banker. “They already had the client base, all they needed to do was elevate their app to take on live action stock trades.

“If they had waited too long, these clients would have migrated to pure-play trading platforms.”

Check out these DFM, ADX numbers for 2023
* ADX's traded value was Dh1.57 trillion in 2023.

* The DFM value was Dh258.1 billion

* ADX's market cap was Dh2.9 trillion.

* The DFM market cap end 2023 was Dh680 billion.

Credit: GCP

As they did on remittances, banks want on stock trades

One thing has to be said about UAE banks – they sure have been quick learners. They did the same when it came to being the choice for remittances and thus prove to be some heavy competition for the long-established standalone currency exchange houses in the UAE.

It is no longer about big banks or number of branches, it is about the services your app gives

- Mazen Salhab of BDSwiss MENA

These days, remittances through bank apps could be as high as 25-35 per cent of the overall, according to some estimates. Other suggest it’s much higher than that.

“It is no longer about big banks or number of branches, it is about the services your app gives,” said Mazen Salhab, Chief Market Strategist at BDSwiss MENA. “And how you rely on one sophisticated app for full access to conventional banking operations, global markets and tradable assets.

“AI-driven KYC, electronic due diligence, global FX settlements, domestic and international money transfer became fully doable without visiting a bank branch or speaking to customer services department.”

All of which find favour with today’s retail investors, populated by a significant number of millennials and Gen Z’ers.

So, to keep them clicking on stocks and more, banks and trading platforms need to ensure optimum CX – or user experiences.

“The battle for wealth management is going to be won through user experience,” said Sarkar. “What matters most to the investor is how intelligent, intuitive and rich the app is. And how much analytics, choice and personalisation is provided.

“It’s an exciting time for customers to invest…”

Banks in the UAE are fully clued into that sentiment – and hope their clients will choose their apps to do so.

Which UAE bank is adding another feature to their app:

* Emirates Islamic Bank launched a Sharia-compliant digital wealth and equity trading platform on its EI + app - and became the first Islamic bank in the UAE to offer such a feature. The platform allows clients to manage investments by trading in Shariah-compliant equities in both local and international markets. As an introductory offer, customers using it will be able to trade in stocks at zero commissions until March 31 2024.

* Mashreq introduced the 'Mashreq UAE' aimed at providing a 'superior' digital experience. It merges the original Mashreq app with the Mashreq NEO one for a unified, single-login platform. "Because of the demonstrated success of our digital banking platforms in the UAE and other global markets, we have undertaken expansion to new markets, such as Egypt, Pakistan, and scaling up our presence in the GCC," said Fernando Morillo, Group Head of Retail Banking, Mashreq.

* Emirates NBD recently rolled out its 'enhanced' app, the ENBD X. New customers have the option to open a digital account with the bank in 'less than 3 minutes'. And now, it's been enabled to allow users access more than 232 mutual funds, managed by the likes of Emirates NBD Asset Management, BlackRock, Fidelity and Pimco. "The addition of mutual funds is another significant step in our journey to create an exceptional, global mobile app, where customers can complete everyday banking needs," said Marwan Hadi, Group Head, Retail Banking and Wealth Management at Emirates NBD.