The United Arab Emirates, in particular Dubai, has been a very popular destination for expats over the last few years. The economy may well have taken a downturn, in line with the worldwide economy, but there are still a significant number of expats living in the region. Therefore it was interesting to see the number of expats from United Arab Emirates taking part in our online poll, conducted in conjunction with Barclays International Banking, and asking – “How do you do your banking abroad?”.
We will now take a look at the results and compare these with the overall poll results to see whether there are any discrepancies, different trends and whether indeed culture plays a part.
The number of expats in United Arab Emirates who do their banking online is slightly above the average for the overall poll which was 70.39%. This would seem to indicate that more expats in the UAE are willing to use the latest technology to organise their banking and their finances. If we take a step back and look at the area it may well be no surprise to the vast majority of us who are aware of the ever increasing expenditure on new technology. The fact is that Dubai has literally grown from near nothing over the last 20 years or so to, at its peak, become one of the prime property sectors in the world. This attracted a significant number of skilled overseas workers to the region and indeed while many left when the economy collapsed there are still a number enjoying their new home in Dubai and the other Emirates.
There are many people who criticised the leaders of Dubai, etc for the level of expenditure in various areas of the economy and the business world. Mistakes were made, confidence has been lost but there is no doubt that the investment in new technology has created a significant return. The number of people now willing to do their banking online will have increased over the years and is a perfect reflection of confidence and reliability of services in the region. When you compare the UAE to the UK (58.57%) there is a large difference which on the surface appears difficult to explain. However, when you appreciate that the UK government is most certainly behind the curve with regards to broadband network investment it is perhaps the main reason.
All of the major banking corporations around the world now offer online banking services and a number of them offer specific expat online banking services. The expat market has grown significantly over the years and a growing demand for a personalised and focused approach to overseas online banking is certainly paying dividends for banks and customers alike. The UAE offers interesting exposure for the major European and American banks and they have certainly not been backward in coming forward.
Mobile banking is predominant made up of two different services which we can assume to be telephone banking on the move and online banking via smart phones and other mobile accessories. We automatically assume that mobile banking is carried out via a mobile phone with the massive increase in mobile accessories including iPads, tablets, etc., has changed this market overnight. One of the major issues in years gone by was the security of mobile broadband and similar services although thankfully there have been big improvements in this particular area.
The speed of mobile broadband services in some areas of the world still leaves much to be desired with countries such as the UK certainly behind the curve. However the United Arab Emirates is well up there with regards to investment in mobile broadband and mobile telecom services although the local result of 7.69% is slightly below the overall result of 8.90%. If you also take into account mobile telephone banking then perhaps we can in some way justify the slightly below average figure because the ability to log on anywhere around the United Arab Emirates is there for all to see. That is not to say that mobile telephone banking does not have a place in the modern day because many people still prefer to speak to advisers over the telephone if they are unable to make it face-to-face. It is perhaps the ability to ask questions in a real-time conversation which attracts most people to telephone banking and the impression that your instructions are being carried out almost instantly. Whether they are or not remains to be seen but very often you are given the impression that the call centre operative is executing your instructions there and then.
While some may look down on mobile telephone banking as something from a bygone era the truth is that not all areas of the world have mobile broadband available. Even some of the more developed broadband countries around the world have still yet to put together reliable services in some of the more rural areas. It is expensive, it is time-consuming and while it can be frustrating for those stuck in unreliable or no broadband areas the only way to gain a return on investment, which can be reinvested, is to attack the larger towns and cities first. For many people telecom banking is a very interesting and very useful fallback facility.
Local branch (6.15%)
Local branch banking is for many people something from years gone by and to many people in the UK in particular it is something which is often inaccessible. The figure in relation to the United Arab Emirates is 6.15% which is well below the 12.22% from the overall poll. This would indicate either a reluctance to visit their local branch or indeed a lack of local branch banking facilities in the area. The UAE consists of a number of Emirates so we are unable to comment upon specific difficulties in specific regions.
There is a general feeling around the world that local branch banking will continue to die out in the months and years ahead and indeed despite protests from various public bodies we are seeing a continual erosion of local bank branches. Many of these bank branches are uneconomical to run and many of them have seen a significant reduction in their visitor numbers. If we are honest, how many of us have visited our local bank branch in the last 12 months?
Banking today is all about accessibility, reliability and security and there have been great strides in these areas over recent years. The internet has literally allowed banks around the world to strip out often enormous base costs which can then be invested back into the business for the benefit of shareholders, management and customers alike. As a consequence, it is highly unlikely that we will see a resurgence in local bank branch facilities in the vast majority of developed countries around the world – in many ways we only have ourselves to blame. There is a hard-core of people who do use their local bank branches but many of us have now switched to the Internet, telephone banking and other facilities. Whether or not you agree with the general trend in worldwide banking it is there for all to see and the statistics do in many cases seem to back up the various policies.
The idea of postal banking will be alien to many people around the world and indeed many expats will possibly never have even considered this. However there is no doubt that again there is a hard-core of people who do use postal banking services and as such this type of service is unlikely to disappear completely in the years ahead. It is relatively inexpensive to run, it’s very easy to execute written instructions and while there may be some delays between posting your instructions and the execution this is all par for the course.
It is difficult to ascertain from the online poll whether a number of expats are using postal banking in relation to banking services in their former homelands or indeed whether they are using postal services in their new homeland. Even though there is no doubt that in the fast-moving markets of today, when everybody wants something done yesterday, posting banking services would not be acceptable to the vast majority people it still seems to have a place. Posting application form such as mortgages, credit cards, etc are a very different situation and ones which are not always time critical. However, when we have online forms, e-mail and other online communication services can we really justify postal banking in this day and age?
There were a number of other banking services highlighted by those who joined our online poll but again many of these were tongue in cheek and do not warrant mention. While online banking, mobile banking, local branch banking and postal banking are the main opportunities available in the banking arena today there are other options in specific areas of the world.
We will now take a look at the various issues which arise with online banking, mobile banking, local branch banking and postal banking. These are issues which very often impact upon more than one service but nevertheless they are worth discussing.
We have the figures for individual countries around the world and there is no doubt that security issues, or perceived security issues, have impacted dramatically upon the willingness of expats to use online banking facilities. Many people will be surprised to learn that the UK has the lowest level of online banking amongst expats at 58.57% with India having the largest at 84.62%.
Despite the fact that the UK has one of the more developed online communities it is no secret that the UK government has experienced delay after delay in relation to the introduction of high-speed broadband across the country. While this is an issue which is ongoing and “in hand” it is very much tied in with security issues. While the vast majority of banks around the world offer some form of online banking facilities, and secure websites, we all need to play our part to improve overall security especially where financial data is involved.
It is very easy to sit back and blame the banking community when things go wrong and scams, frauds and other criminal activity is carried out. The truth is that the banking community has invested millions upon millions of dollars into security systems and users also need to play their part with antivirus software and further education regarding scam e-mails and hoax requests. If we all act sensibly, ignore unwanted or potentially fraudulent instructions then the chances of any third party becoming involved in our finances would be significantly reduced.
There is no greater convenient banking service than the online services offered around the world today. However, there is still an interest in local branch banking in some areas of the world with many expats preferring to communicate face-to-face with banking officials. The convenience of online banking and local branch banking will differ enormously from country to country because of broadband and the local branch networks. This is perhaps one of the main reasons why we have seen such a wide variation in the figures associated with local branch banking and online banking.
We can also assume from the online poll that because online banking and local branch banking are the most popular and second most popular options that either/or is available in the vast majority of countries. There is also the backup of mobile banking which also now incorporates online banking via mobile broadband services. In many ways this is currently seen as a backup by many people because the vast majority of expats are likely to have contacted their bank call centres if there is no access to local branch facilities or the Internet is not available. Customers will always use the most convenient services available to them whether this is Internet banking, telephone banking or postal banking.
It is also worth mentioning that the traditional banking open hours in some countries are the same as the traditional working hours therefore many people do not have access to their local bank branch on a regular basis. Unsociable banking hours are perfect for those who have online banking facilities because they can literally review their finances 24/7.
The reliability of banking services around the world has been called into question on numerous occasions in years gone by. Many customers in countries such as the UK have been complaining about the ongoing closure of local branch facilities while there has also been significant unrest when data protection breaches are made public in relation to banking services. The reality is that no one banking service is ultimately 100% reliable and if we all take appropriate security measures to protect ourselves as much as possible then any reliability issues should not lead to data protection and data leakage issues.
If you use online banking in your everyday life you will likely notice how important it becomes when it is not available for a short period of time. It is therefore vital to have a backup service such as telephone banking and even local branch banking where possible. There are some financial transactions which you will need to instigate and execute as soon as possible and time may well be of the essence.
The United Arab Emirates are seen by many people as one of the more forward thinking technology-based economies of the world having invested millions upon millions of dollars in this particular area. As a consequence it is no surprise to learn that online banking is very popular amongst expats in the region and when you also consider the number of skilled workers who moved to the area it further rubberstamps this trend. Broadband is available to the masses across the United Arab Emirates and indeed when you see the up-and-coming business developments this is a vital area for the future.
Dubai in particular seems to attract more attention than most in the UAE although bizarrely it is not the largest of the Emirates. A number of people have looked down upon the economic rise and fall of the area when in reality there were management problems, there were finance problems and perhaps the ruling bodies did invest too much in to shorter a period of time. However, there is still a very good base for the future and banking facilities are now readily available in a variety of different forms for expats living and working in the UAE.
There is no doubt that the popularity of online banking is directly related to the amount of investment by local governments and Internet service providers. We also have the issues of security, reliability and speed of the Internet all of which have been addressed by various bodies in the UAE. It would have been interesting to see how many people would even have considered online banking some 10 years ago or even 20 years ago compared to the current figure. There have been massive changes in the region and there are certainly more changes on the horizon. The ruling parties in the UAE still have significant cash to invest in the future and technology and communication will most certainly be at the forefront.