We carried out a very interesting poll on the expatforum.com website asking how do expats do their banking when overseas. The research, done in conjunction with Barclays International Banking, offers some very interesting answers and some even more interesting trends in relation to new technology, online banking, postal banking, etc. We will now take a look at the overall poll results and then compare and contrast these with individual country results to see the relevant strengths and popularity of various banking services.
Online banking (70.39%)
The overall poll result for online banking was 70.39% which is fairly high and perfectly reflects the growing interest in online banking facilities. Despite the fact there have been a number of hiccups along the way it seems online banking has been accepted and embraced by the expat community which is perfect for banks offering specific expat banking services.
With regards to the individual country breakdown it was interesting to see that India at 84.62% was the highest scoring expat community in relation to the popularity of online banking although Australia fared very well at 80.77%. This perfectly illustrates these two countries move towards new technology, new communications and a new economy. A number of countries were in the 60% to 70% although surprisingly it was the UK at 58.57% which scored the lowest both this particular subject.
When you take into account the fact that the UK government is in the throes of spending billions of pounds on a new superfast broadband network it is disappointing to see the take-up of online banking by expats at the bottom of the table. Even though billions of pounds have been put aside by the authorities to improve the broadband network the current facilities are more than adequate for the vast majority of online savvy consumers. However, there have been a number of hiccups along the way with regards to the UK banking industry and in particular the online arena with some criminal gangs capturing large amounts of data due to security issues.
There is no doubt that overall security is a major problem and a major issue for many online consumers and the UK has certainly suffered. India seems to be streets ahead of the majority of expat communities with only Spain at 80% anywhere near. As and when security issues are addressed by the banking community and consumers we should see the overall uptake of online banking improve. While many people are very quick to blame the banks for data security issues the truth is that we all have a part to play in this particular area.
Mobile banking (8.90%)
In this instance we will take mobile banking to include mobile telephone banking and mobile broadband banking both of which are available in many areas of the world today. The overall uptake of 8.90% is a fairly small figure however it is the third-largest from the overall vote. There is a suspicion that many expats are using mobile banking as a fallback facility in the event that online banking is not available in their particular new homeland.
The individual country results vary widely with expats living in France and expats living in Spain seemingly showing little interest in mobile banking with a 0% vote. This compares with 21.05% for expats living in Pakistan which is literally streets ahead of the nearest competitor which is the UK at 10%. There is no doubt that mobile banking, whether telephone banking or mobile broadband banking, does have a part to play in the overall banking arena although traditional land-based online banking is by far and away the most popular.
It was very interesting to see that some countries seem to have actually rejected mobile banking while others such as Pakistan appear happy to embrace this particular service. The very fact that the vast majority banking corporations around the world offer both online and telephone banking does offer a number of opportunities to capture new customers and give customers what they want. There are obvious considerations to discuss with regards to mobile banking which include not only the availability of traditional mobile telephone signals but also the ever-growing influence of mobile broadband.
There are very few countries in the world where you will not be able to obtain some kind of mobile telephone signal although the reliability may well vary. However, while many countries are currently looking to adopt mobile broadband it is not a service which is available across-the-board and indeed many rural areas of the world will need to wait many years before it is fully integrated. As a consequence it is no surprise to see that on the whole mobile banking is not perceived to be the first port of call for the vast majority of expats although whether it is something of a fallback system is open to debate.
In the years to come we will see significant investment in mobile broadband technology and indeed the security aspect which many people are concerned about will improve. Billions upon billions of dollars and billions upon billions of pounds have been put aside by the various governments to ensure the success of mobile broadband which will in due course become an integral part of local economies. We have seen the power of traditional land-based Internet facilities and this is likely to be replicated in the mobile arena in due course. However, when this will be remains to be seen.
Local branch banking (12.22%)
The figure of 12.22% in relation to local branch banking may well surprise many people when you consider that those questioned are living overseas from their original homelands. However, the worldwide financial arena is very much concentrated around a small number of major institutions and even if they do not have direct access to markets overseas there will always be some kind of joint-venture. Therefore, whether you are looking towards Spain, Canada, the USA or the other countries mentioned in our online poll you will likely come across an array of familiar banking logos and banking institutions.
The figures with regards to local branch banking vary enormously across-the-board with France at 27.27% leading the way. Surprisingly the UK is not too far behind at 24.29% at a time when a number of UK local bank branches are being closed down or merged with neighbouring facilities. It seems that the lowest uptake of local branch banking is occurring in India with 3.30% although Pakistan at 5.26% is not too far away. It may well be that the availability of local bank branches is not as high in some of the more rural areas of Pakistan and India compared to countries such as the UK. This may well explain some of the difference in voting patterns and voting trends across-the-board. It is also worth noting that Pakistan and India in particular fared badly with regards to local branch banking but were above average in relation to mobile banking.
The issue of local bank branches is a very controversial and ongoing dilemma because the vast majority of banks around the world have been looking for some time to reduce their land-based portfolios. Gone are the days when you could expect to have some form of formal relationship with your banking manager and banking advisers as more and more customers complain that they are nothing but a “number”. Whether this is correct or not is open to debate but by taking out the “human touch” from banking decisions it does lay bare the facts about individual customer situations. It also ensures that there is no favouritism in relation to banking arrangements and banking decisions which on the whole has to be applauded?
Postal banking (4.55%)
The idea of postal banking is something which the vast majority of expats around the world may never have even considered in this day and age. The online banking arena has literally taken the world by storm and there are very few people who will not have at least attempted to use online facilities. So while the figure of 4.55% is relatively low it will surprise some people to learn that postal banking has even registered in the poll.
Postal banking can take a variety of different forms including deposits, withdrawals, credit card applications, mortgage applications and many other financial transactions. The specific country breakdown is very interesting with Spain, Pakistan and Canada registering no votes for postal banking from the expat community while France was the highest at 9.09%, the USA at 5.77%, United Arab Emirates at 4.62%, the UK 4.29%, Australia at 3.85% and India at the 1.10%. The truth is that online banking has crushed postal banking and there are only a relatively small number of postal banking customers.
The problem with postal banking is there are significant time delays between posting your instructions and potential execution and if there are other problems to sort out then the delay may well be extended. When you take into account the fact that you can literally e-mail over a signed agreement within seconds is there really a place for postal banking in the future. The vast majority of expats have voted in decent numbers to suggest that postal banking is on the way out but there are some who may well be reluctant to embrace new technology and the Internet in particular.
It will be interesting to see how the subject of postal banking is breached in the months and years ahead because many believe it will die a slow death. It may well be acceptable for non-time critical arrangements but in this day and age there are very few instances where you can wait weeks for a decision or a transaction to be carried out. The situation is even worse if you are an expat living overseas and posting your banking instructions back to your former homeland. The delays in this particular instance could be enormous and could in some cases cost you money!
Other banking services (3.93%)
While there were a number of suggestions with regards to other banking services which expats may consider when doing their banking very few of them were worth mentioning and a number were made tongue in cheek. However, we will now look to address the more popular “other banking services” mentioned: –
There are some who may argue that using bank machines in your new-found homeland is tantamount to local branch banking although it is potentially more convenient with ATMs available 24/7. However, there are limited transactions which you can carried out at an ATM machine therefore if you’re looking at the overall banking picture perhaps machine banking is only part of the process?
Don’t use banks
There were some suggestions that expats overseas were afraid to use local banks or did not want to use local banks for other reasons. This seems a very bizarre situation in this day and age and you wonder whether these particular expats are keeping their money under their “mattress”. If this is the case there is the potential to lose out on interest, obvious security issues and potential problems with money-laundering obligations.
While some people may well avoid carrying significant amounts of cash on them the fact is that some people do still prefer cold hard cash in their pockets. How much cash you can carry around safely is a matter for debate and the fact is that you will not be able to pay all of your bills using cash because some of the payment processing branches may require online banking or telephone banking. Cash may be king in the eyes of some people but to many it is nothing but a hindrance.
This rather tongue in cheek comment regarding “careful” banking services does in some ways illustrates the security issues, reliance issues and convenience issues which many expats feel when moving overseas. It is vital that you choose a banking provider who will give you exactly what you want, when you want and in a format which is acceptable to you. Unless you are fully convinced about the services on offer you may need to look elsewhere.
There are some interesting conclusions and trends in this banking poll because if you take online banking and mobile banking as the “modern era services” against local branch banking and postal banking as “yesteryear era services” the results are quite interesting. The average for these two particular groups is 79% and 17% of the overall poll although surprisingly India fares best in the modern world with 94%, Pakistan with 90%, Australia with 88%, United Arab Emirates with 84%, Spain with 80%, Canada with 75%, the USA with 73%, the UK with 69% and France with 63%.
Those which fair better with the so-called “yesteryear era services” include France with 36%, the UK with 28%, the USA with 21%, Spain with 20%, Canada with 16%, Australia and the UAE with 11%, Pakistan with 5% and India with 4%. This compares to just 17% of the overall vote.
There is no doubt that the online era is most certainly upon us with the vast majority of expats around the world now using online banking as their chosen service. This situation is only likely to increase in the months and years ahead as security issues, convenience issues and reliability issues are addressed by governments around the world. During our review of the online poll we commented upon a number of spending initiatives around the globe as governments become acutely aware that both traditional land-based broadband activity and mobile broadband activity will be central to economic growth in the short, medium and longer term.
It is also worth noting that the vast majority of major banks around the world now have specific departments looking after the expat community wherever they may be. Through a mixture of direct exposure via overseas branches and joint ventures with local banking corporations nearly all of the major worldwide banking institutions have exposure to countries which are popular with the expat community. There are very few countries in the world where you will not be able to walk down the local high street without noticing a familiar bank logo or bank name. The fact is that the worldwide banking community is now closer than ever and a relatively small number of major institutions are dictating the pace of change and in many cases the services on offer.
This poll has given us a great insight into the world of expat banking and the fact that the majority have consigned more traditional banking such as local branch banking and postal banking to the bin. There are still some people who prefer to use this particular style of banking which is more personal and in many ways more traditional. However, the truth is that even if you are not fully satisfied with online banking services there are still relatively secure e-mail services which will allow you to effectively carry out postal banking in real-time.
The pace of change is certainly stepping up in the worldwide banking arena and expats who may well retain banking facilities in their former homelands are in many ways leading the way. They may well need access to these facilities 24 hours a day seven days a week because many people now choose to do their banking at some of the most unsociable times of the day and night. Convenience is a major element of the new banking arena although security is still by far and away dictating who transfers to this new online world and at what pace.