Three out of four GCC customers would be ready to switch banks for a better digital experience: EY

Dubai, 15 November 2015

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  • Up to 64% of GCC customers would feel comfortable switching to a digital-first bank, and this also promises to dramatically transform the role of branches
  • Mobile banking penetration in the GCC is low; only 14% of customers banking interactions are made on smartphones, mainly due to lack digital convenience
  • EY research suggests that without introducing digital initiatives, up to 50% of retail banks’ net profit could be at stake

Dubai, 15 November 2015: According to the EY GCC Digital Banking Report 2015, smartphone penetration for main banking interactions in the GCC is low; only 14% of customers banking interactions there are made on smartphone. Conversely, smartphones are a way of life for a dominant majority of banked customers in the GCC with 98% of the surveyed banking customers being equipped with modern smartphones.

The report, which will be presented by Dominique Corradi, MENA Digital Financial Services Leader at the Middle East Banking Forum tomorrow, surveyed customers on their banking experiences across the GCC region.

Paul Sommerin, MENA Financial Services Technology and Transformation Leader at EY, says:

“Mobile banking has not fully taken off in the GCC. A large number of transactions are still made on home computers or ATMs, or through traditional channels involving human interaction, such as branches or call centers. Only a limited number of banking transactions are mobile. This is very surprising given the extremely high number of banking customers that use smartphones. Outside of the region, digital-only banks, which don’t have a branch network, have been rising in popularity due to their agility and lower cost base.”

Customers are not loyal to GCC banks

The survey highlighted that 78% of GCC customers would be ready to switch bank for a better digital experience and up to 64% would feel comfortable switching to a digital-first bank, with less reliance on branch network.

Robert Abboud, MENA Financial Services Advisory Leader at EY, says:

“The disconnect between customer expectations and what banks in the GCC can deliver is more distinct than ever. This is the message from EY’s conversations with more than 2,000 customers across Saudi Arabia, UAE, Qatar and Kuwait, an analysis of 700,000 sentiments on social networks; and discussions with 30 leading banks and 80 banking industry leaders. Addressing customer needs in an increasingly digital world means disrupting and rewiring existing business models for a fresh customer experience. Our research suggests that up to 50% of retail banks’ net profit could be at stake.”

Customers expect banks to provide more convenience, less paper, more speed, pinpoint accuracy and a friendly service environment. The overwhelming majority of customers asked for an improved banking experience.

Ashar Nazim, Partner, Global Islamic Banking Center at EY, says:

“A clear consensus emerged on the GCC customer priorities: anytime-anywhere, paperless interaction, fast, accurate and friendly. This is a huge opportunity to engage customers in a bigger and better way. As yet, there is no clear leader in the GCC digital banking space. The challenge will be in execution, and the majority of banks appear to be struggling with rapid prototyping and market adoption. Our message to banks is to be the one – win the digital talent war by creating an ecosystem of partnerships to make life better for your customers.”

Putting customers first

The report reveals that trust, convenience and personalization form the foundation of customers establishing a digital relationship with their bank – and technology is the enabler. 71% of GCC customers would increase their usage of payment services if their banking relationship was made convenient simple and accessible.

Banks hold a wealth of data on their customers that can be used to create more targeted customer journeys, improve experience and increase engagement, which is true across channels. Engaged customers are more willing to invest with their bank (by paying a little more, or adding more accounts and services).

“Mobile-first is the future of retail banking in the GCC, but it is not enough for banks to just introduce new digital channels. They must reinvent their customer processes to offer technology-enabled, simple, end-to-end banking experiences. The key solutions in demand that could benefit tremendously from digitization are payments, account opening and mortgages, with a significant potential to increase value per customer for banks,” concludes Paul.

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