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cashy YouGov Siraj financial habits study English cashy YouGov Siraj financial habits study English Presentation Transcript

  • Finance & Banking in the UAE A report prepared by YouGov Siraj Contact: Scott Booth scott.booth@yougovsiraj.com Contact: Rebecca Savard rebecca@cashy.me Dubai, September 2010 | Total Sunday, October 3, 2010
  • Syndicated Banking Survey Table of Contents  Executive summary  Background & methodology  Banking profile  Current bank – reasons for choosing, level of satisfaction, likelihood to recommend  Credit card usage  Loans  Islamic banking | Sunday, October 3, 2010
  • Executive Summary | Total Sunday, October 3, 2010 View slide
  • Syndicated Banking Survey Executive Summary UAE banking profile Half of UAE residents have been banking in the UAE for 5 years or longer, and most use more than 1 bank Dubai Islamic Bank and HSBC Middle East are the two most used banks in the UAE Personal Current Accounts, Debit Cards, Credit Cards & Savings Accounts are the primary banking products used in the UAE Term Deposits are the instruments with the most reported investment activity over the past 12 months, while Hedge Funds are seeing virtually no involvement from UAE residents Current Main Bank Salary transfer is the primary driver for main bank choice Trust and transparency also regarded as important when it comes to banking choice for UAE residents Overall, UAE banks are not performing up to customer expectations, with only one-in-five respondents saying they would recommend their main bank to a friend or colleague Service issues are the main source of grievances when dealing with banks. Hidden charges and high interest rates are also a source of dissatisfaction to many. One-in-five are considering terminating relationship with their main bank. High and hidden charges & poor customer service named as the main motivators for termination. | Sunday, October 3, 2010 View slide
  • Syndicated Banking Survey Executive Summary Credit Card Usage Nearly all respondents have a credit card of some sort, though relatively few have Islamic banking credit cards. Visa and MasterCard are the leading card types in the market. Credit cards are used most often for shopping and travel purposes and least often for cash withdrawals and payment of school fees ‘Free for life’ is by far the most attractive offer to respondents in terms of switching Credit Card providers More than one-third of UAE respondents have cancelled a credit card in the past 12 months. High interest rates and superfluous charges are the main reasons cited for canceling cards. Only one-third of respondents say they are likely to purchase an insurance policy covering their credit card payments in case of emergency Loans Over a third of respondents have taken out a loan of some kind, and purchasing a car is the main reason for taking a loan Most respondents tend to go to their main bank for a loan. Offering competitive rates and the bank’s credibility are also seen as important in bank selection. A quarter of UAE respondents plan to take a loan in the next 6 months. Most are likely to take Housing, Car or Investment loans. | Sunday, October 3, 2010
  • Syndicated Banking Survey Executive Summary Islamic Banking One-third of respondents claimed to be currently using Islamic banking products and services. Among these Current and Savings Accounts are the most popular products. Half of those not currently using Islamic banking products appear at least open to the possibility of using them in the future Lack of understanding is a major barrier to consideration of Islamic banking services, though many respondents also say they are satisfied with conventional banking services and do not need to consider alternatives | Sunday, October 3, 2010
  • Background & methodology | Total Sunday, October 3, 2010
  • Syndicated Banking Survey Background & methodology  As a company, YouGov Siraj believes in being proactive in gauging public opinions and addressing client needs.  With this objective in mind, we have been conducting syndicated studies to assist clients understand consumer behaviour and attitudes within particular business sectors.  One of the sectors that has always been of interest to us and one that has lately faced many challenges is the banking and finance industry.  For the present study, a total of 12,000 individuals were surveyed across the Middle East, including over 2,500 respondents in the UAE.  This study was conducted online using YouGov Siraj online panels across GCC, Levant and North Africa.  The current document focuses on the UAE where 2,788 interviews were conducted between 7th April, 2010 and 2nd May, 2010. | Sunday, October 3, 2010
  • UAE banking profile | Total Sunday, October 3, 2010
  • Syndicated Banking Survey Half of UAE residents have been banking in the UAE for 5 years or 25% 24% For how long? Westerner expats 12% have been banking 11% 11% 11% in the UAE longer 6% than other nationality groups Average: 5 years and are more likely to bank with a single Less than 1 year1 to 2 years 2 to 3 years 3 to 4 years 4 to 5 years 5 to 10 years More than 10 years bank. Women are also more likely to report banking with a 35% No of banks currently with? single bank. 29% Length of banking 19% and number of Average: 2 banks banks used are 8% 4% 5% higher among older respondents. 1 2 3 4 5 6 or more Q. For how long have you been banking in your country of residence? Q. How many banks do you presently bank with for your personal banking needs in country of residence? Please consider all those where you have an account (savings/ current), credit cards, loans (car/ personal), investments, mortgage, etc. Base: All respondents (n=2,788) | Sunday, October 3, 2010
  • Syndicated Banking Survey Dubai Islamic Bank and HSBC Middle East –The two most used Banks currently bank with? Dubai Islamic Bank 21 HSBC Bank Middle East 21 Mashreq Bank 18 Abu Dhabi Commercial Bank 17 Emirates Bank International 16 National Bank of Dubai 14 and Arab expats are Emiratis more likely than others to use ABN Amro Bank NV (now Royal Bank of Scotland) 14 Islamic banks. Western expats National Bank of Ras Al Khaimah (RAK Bank) 13 HSBC is higher than usage of other groups, while usage of CitiBank NA 12 RBS, Mashreq and Standard Abu Dhabi Islamic Bank 12 Chartered tends to be highest First Gulf Bank 9 Asians. amongst Standard Chartered Bank 9 Islamic banking seems to be National Bank of Abu Dhabi 7 most popular amongst the Barclays Bank 7 respondents (i.e. under younger 25 years old). Dubai Bank PJSC 6 % Emirates Islamic Bank 5 Q. Could you please specify which of the following banks you presently bank with? Consider all types of bank products and services you currently use (e.g. current accounts, savings accounts, investment products, credit cards, etc). Base: All respondents (n=2788) | Sunday, October 3, 2010
  • Syndicated Banking Survey Personal Current Accounts, Debit Cards, Credit Cards & Savings Financial products currently use? Current account for personal use (excluding business accounts) 75 Cash withdrawal / ATM card/ debit card 71 Credit card 64 Savings account 54 Loans37 Online banking / brokerage most likely to 37 Western expats are useMoney transfer current accounts, debit cards, 19 credit cards, online banking/ Term deposits 9 brokerage and money transfer servicesInsurance banks. Life from their 8 Meanwhile, Emirati respondents Islamic were most likely to report having a Saving Certificates 5 savings account.5 Shares/stocks Young respondents exhibit lower Equity funds 3 rates of usage for most banking Travelers cheques 1 product types. % Locker facility 1 Base: All respondents (n=2788) Q. Which of the following financial products / services do you currently use? (Please select all that apply) | Sunday, October 3, 2010
  • Syndicated Banking Survey Term Deposits are the instruments with the most reported investment activity over the past 12 months, while Hedge Funds Financial products invested/disinvested in in past 12 months? 31 Term deposits 8 61 Asian expats are most likely 21 to have invested in Term Shares/stocks 6 Deposits in the past 12 73 months while Emiratis are 14 the most likely to have Equity funds 5 invested in an Islamic based 81 savings plan. 12 Premium Bonds 4 Young respondents are less 84 likely to be investing across 12 all instruments except Other 4 Islamic based savings plans. 84 12 Islamic based saving plan 3 85 2 % Hedge funds 2 96 Invested in past 12 months Disinvested in past 12 months Did not invest/disinvest in past 12 months Q. Have you invested/ disinvested in any of the following financial products in the past 12 months? Base: Those who had investments (n=761) | Sunday, October 3, 2010
  • Current Main Bank | Total Sunday, October 3, 2010
  • Syndicated Banking Survey Salary transfer - The primary driver for main bank choice Reasons for choosing main bank? Salary transfer (requirement from my company) 58 Ease of access to the branch 35 Online banking facility 33 Type of products /services offered by the bank 28 Proximity to residence 24 Asian expats are most likely to say that Proximity to salary transfer requirements drove work place 22 their main bank decision, while Customer service oriented bank least likely to name this as Emiratis are 21 their main driver. Emiratis are most Recommendation of friends/ family proximity to home, ease of likely to cite 20 access, type of products/services Lower bank charges/ fees having 17customer service offered and a oriented bank as the key drivers for Linked to banks in my home country selecting their main bank. them when 8 % Other 9 Respondents under 25 years old are most likely to choose their main bank based on recommendations from friends and family. Q. What are the reasons for choosing ---------as your main bank? Base: All respondents (n=2788) | Sunday, October 3, 2010
  • Syndicated Banking Survey Trust and transparency also regarded as important when it Most influential factors when selecting banks? I can trust 2%20% 4% 4% 70% The importance of having a ‘Bank I can Transparent in its dealings 4% 25% 2% 4% 65% trust’ increases with Makes things simple for me 3% 29% 4% 2% 63% respondent’s age. Knowledgeable and professional staff 3% 28% 2% 5% 63% Has a widespread network of branches and ATMs 4% 27% 5% 2% 63% Offers prompt service 3% 28% 4% 2% 62% Offers online banking facilities 4% 25% 3% 6% 61% Friendly and approachable staff 3% 30% 2% 4% 61% Understands my financial needs 4% 33% 2% 8% 53% State of the art technology and systems 3% 34% 8% 2% 53% Offers round the clock banking facilities 4% 34% 3% 9% 52% Offers the entire range of products and services relevant to me 3% 38% 8% 3% 48% Global presence 4% 7% 36% 16% 37% Offers Islamic banking products 7% 18% 17% 22% 36% Base: All respondents (n=2788) Don't know Not Important at all Unimportant Important Very Important Q. Listed below are some statements that people like you said would influence their decision in selecting banks for their personal banking needs. On a scale of 1 to 4, where 4 is ‘Very important’, 3 is ‘Important’, 2 is ‘Unimportant’ and 1 is ‘Not at all important’ please rate each statement. | Sunday, October 3, 2010
  • Syndicated Banking Survey Overall, UAE banks are not performing up to customer expectations, with only one-in-five respondents saying they Likelihood to recommend main bank to others? 50% Unlikely to recommend 20% Likely to recommend (rated 1-5) (rated 9-10) Among our respondents, Emiratis are most likely 1 2 3 4 6 7 8 9 10% 27% 14% to recommend their main bank to others while 3% 4% 3% 3% 9% 12 11 6% % % both Asian and Western expats are very unlikely to do the same. Base: All respondents (n=2788) | Q. How likely are you to recommend your main bank to a friend or colleague? Sunday, October 3, 2010
  • Syndicated Banking Survey Service issues are the main source of grievances when dealing Main sources of grievances when dealing with banks? Delay in answering phone call 28 Delay in resolving the problem 24 High service charges 22 Unprofessional customer services 22 Hidden charges 19 High Interest rates on banking services 18 Lack of personalized service 16 Western expats are most likely to Slow services inreport having experienced billing bank 16 issues, hidden charges, lack of Lack of transparency 16 transparency, unprofessional customer service, slow services, Requirement of lot of information for verification 13 delay in resolving a problem and Delayed receipt of statements 10 shifting relationship managers. Billing issues 9 Non-working website for Online Banking service charges and delay in High 7 solving problems are cited most Shifting relationship managers 6 often by young respondents. Other 7 % None of these 27 Base: All respondents (n=2788) Q. Given below are some grievances people like you said they faced while dealing with the bank. Which of these have you faced in the past 1 year while transacting with your main bank ? | Sunday, October 3, 2010
  • Syndicated Banking Survey One-in-five are considering terminating relationship with their Reasons for termination? 47 High s Does 42 give importance to not Considering terminating banking Does40 respond to custom not relationship? 37 Lot of hidden 20% 31 Unprofessional 26 Staff is not knowledgeable about the products/s 80% 24 Westerners tend to Unresp consider terminating 20 Inconvenient locations of ATM, branches or credit card pa relationship with their bank most often due to poorUnavailability of online ba service. 9 Yes No % 23 Base: All respondents (n=2788) Q. Are you considering termination of your relationship with your current “main” bank - …………………? Q. Why are you considering termination of your relationship with the current ‘main’ bank - …………..? | Sunday, October 3, 2010
  • Credit card usage | Total Sunday, October 3, 2010
  • Syndicated Banking Survey Nearly all respondents have a credit card of some sort, though 79 Number owned The number of credit 32 cards owned increases 27 16 with respondent age. 15 4 8 4 7 6 1 1 1 2 3 4 5 More than 5 None Conventional Banking Islamic Banking % 9799 Asian expats are most Type of cards owned likely to have MasterCard 4744 products while Western 30 expats are virtually alone 2217 16 9 6 in having American 3 1 3 2 1 1 2 1 Express cards. 1 2 3 4 5 More than 5 None VISA MasterCard American Express Diners Club International Base: All respondents (n=2788) Q. How many Credit cards do you currently own? Q; How many of your credit cards are….? | Sunday, October 3, 2010
  • Syndicated Banking Survey Credit cards are used most often for shopping and travel Main purposes for using credit cards? Retail shopping 5% 22% 73% Emirati and Western expats more often use credit cards for online shopping than other Grocery shopping 9% 24% 67% respondents, while Asian expats use cards for groceries most often. Emiratis and Arab Airline tickets 8% 26% 66% expats are most likely to take advantage of cash withdrawal Utility bills 16% 29% 55% offers. Online shopping 16% 46% 38% Cash withdrawal 30% 48% 22% Children's school fees 49% 39% 12% Other 60% 28% 12% % Don' t know/Can't say Least often Most often Base: Those who own credit cards (n=1795) | Q. For what purposes do you use your credit cards? How often? Sunday, October 3, 2010
  • Syndicated Banking Survey ‘Free for life’ is by far the most attractive offer to respondents in Asians are most likely to find ‘free-for-life’ offers attractive, while Western expats are Most attractive offers for switching cards more attracted by loyalty points than others, Arab expats are more interested in 0% 62 Free for life option interest loans and Emiratis are most interested in annual fee waivers. 41 Annual fee waiver Young respondents are less interested in Cash back facility on money spent / card usage 37 free-for-life and loyalty points, but more interested in discounts at retailers and cash Discounts at retailers such as restaurants/ airlines/ entertainment/ theaters 35 loans at 0%. Cash loan at 0% interest and nominal processing fee 25 Switched cards for balance Loyalty points transferfor redeeming rate 24(Scheme at special points) 20 Credit limit to suit my needs 24% 19 Availability of Islamic card Balance transfer (outstanding amount on to another card) 13 Base: Those who own credit cards 3 Other (n=1795) 76% % 4 Don't know/Can't say Yes No Balance Transfer is the least attractive of the offers tested, but nearly a quarter of respondents have taken advantage of a promotional balance transfer offer in the past Q. Please identify 3 product features which are most likely to make you switch from one credit card to another? Q. Have you in the past switched from credit card of one bank to another to avail of balance transfer facility (where a bank takes on the role of clearing your outstanding on a credit card with another bank for a specific fee/ interest charge)? | Sunday, October 3, 2010
  • Syndicated Banking Survey More than one-third of UAE respondents have cancelled a credit Reasons for cancelation? Cancelled cards in 40 High last 12 months? 37 Paying for unnecessary charges- insurance coverage, credi 36 Free for life option was 38% 35 Not using fo 62% 33 Other cards providing b 22 Unable to continuously maintain m Expat Arabs are most likely 15 Lo to have canceled a credit card because of high Yes 13 interest rates, while Asians bac Cash No are more likely to cite payment of14 unnecessary charges. 1 Don't kn % Young respondents are least Base: Those who own credit cards (n=1795) likely to have cancelled a credit card for any reason. Q. Have you cancelled any credit cards in the past 12 months? | Q. What were the reasons for cancelling the credit cards you owned? Sunday, October 3, 2010
  • Syndicated Banking Survey Only one-third of respondents say they are likely to purchase an Likelihood to purchase insurance policy on credit cards? 16% 12% Westerners are much less likely than other respondents to take out insurance covering their credit card debt in case of emergency. This may 25% be indicative of the more mature nature of the credit market in these 28% respondents’ home countries. Young respondents are least likely to 18% purchase insurance covering their credit card debt. Very likely Likely Unlikely Very unlikely Not sure/ Can't say Base: Those who own credit cards (n=1795) Q. How likely are you to purchase a policy which will cover credit card payments in case you are unable to make outstanding payments for some reasons? | Sunday, October 3, 2010
  • Loans | Total Sunday, October 3, 2010
  • Syndicated Banking Survey Over a third of respondents have taken out a loan of some kind, For what purpose did you take the loan? Car 76 Have taken a loan Housing 24 Investment purpose 14 Asian respondents are less Payment of credit card bills 13 37% likely than other to have taken Wedding - self/ family out a loan for 9 car, while expat a Arabs are less likely to have Travel 4 taken a housing loan. Emiratis 63% are more likely to have taken Business 4 out a loan to pay for a wedding. Medical treatment of family 3 Younger respondents are less Yes Education of children have taken housing likely to 3 No and investment loans than others Education of self 2 Medical treatment of self 1 % Other 4 Base: All respondents (n=2788) Q. Which of the following financial products / services do you currently use? (Please select all that apply) Q. You specified in the beginning that you have taken loan/s from your bank. For what purpose/s did you take | the loan? Sunday, October 3, 2010
  • Syndicated Banking Survey Most respondents tend to go to their main bank for a loan. Most influential factor when deciding which bank to go for a loan? My main bank 61 Competitive interest/ profit rate 49 Credibility of the bank 44 Salary transfer 43 Suit my needs 38 Ease of sanction 32 Emiratis emphasise existing banking Professional attitude of the bank 30 relationships, credibility of the bank and Islamic bank 30 Islamic banking credentials more than other nationalities. Westerners indicate Recommendation from friends/ family 29 their major criterion is the bank’s Fixed rate loan options 21 standing as their current main bank. Variable loan options 19 Young respondents are more likely than older ones to cite credibility, Global bank 19 recommendations and loan options as Local bank 18 reasons for choosing a bank from which to take a loan. Other 14 Base: Those who took loans (n=1043) Q. Which of the following factors influenced your decision to select this bank for loan purpose? | Sunday, October 3, 2010
  • Syndicated Banking Survey A quarter of UAE respondents plan to take a loan in the next 6 Purpose of loan? Housing 20 Car 19 Intention to take loan Investment purpose 17 Payment of credit card bills 9 24% Business 7 Westerners are most likely Education of out loans for cars to take self 4 and housing while Asians Weddingare more likely to take out self/ family 4 loans for investment purposes. Education of children 3 76% Young respondents are Travel 1 more likely than others to Yes Medical treatment of family 1 expect to take loans for No their own education. Medical treatment of self 0 Other 40 Q. Do you plan to take any loan in the next 6 months? Q. For what reasons do you plan to take the loan? Base: All respondents (n=2788) | Sunday, October 3, 2010
  • Islamic banking | Total Sunday, October 3, 2010
  • Syndicated Banking Survey One-third of respondents claimed to be currently using Islamic Currently use Islamic Products and services used banking? Current account 50 Savings account 50 Cash withdrawal / ATM / debit card 42 Car/ house loans 31 36% Credit card based on Sharia (Ijarah) 25 64% Savings certificate 11 Personal loan 11 Term deposits 9 Respondents under 25 Bonds/Funds 6 years old are less likely Yes than others to use Islamic No car, Takaful cover 4 house and personal Emiratis, expat Arabs and loan products Over draft 2 respondents under 30 are most likely to use Islamic Other loan 2 banking currently % Other 1 Base: All respondents (n=2788) Q. Do you presently use Islamic banking products and services? | Q. Which of the following Islamic banking products/services do you presently use? Sunday, October 3, 2010
  • Syndicated Banking Survey Half of those not currently using Islamic banking products appear Likelihood to use Islamic banking products/services in the future? Western respondents are 24% 22% most unlikely to consider Islamic banking in the future, while younger respondents are more likely than older to consider Islamic banking. 21% 33% I will 'not consider' I 'may consider' I will 'definitely consider' Don't know/can't say Base: Non-Islamic Banking Customers (n=1779) Q. Which ONE of the following statement best applies to you regarding future use of Islamic banking products / | services? Sunday, October 3, 2010
  • Syndicated Banking Survey Lack of understanding is a major barrier to consideration of Likelihood to use Islamic banking products/services in the future? I don't understand how the Islamic Banking 44 works I am satisfied with conventional banking 27 I do not see any difference between the Islamic and Conventional banking 17 I am not sure I am eligible to use Islamic banking products/services 17 I don't feel it works on Islamic principle/ Shariah in the true 16 sense I think it is only for Muslims 13 Islamic banking is not available internationally 11 I am not sure about the requirements/documents/paper work 11 Islamic banking products are more expensive 10 Islamic banking is not available in my country of9 origin The bank I bank with does not offer Islamic banking products/ services 8 I think Islamic banking is too complicated 8 Islamic banks are not innovative and technology 5 savvy 3Other % Don’t know / Can’t say 18 Base: Non-Islamic Banking Customers (n=1779) | Q. What have been the reasons/barriers for not using Islamic banking products and services? Sunday, October 3, 2010
  • Appendix | Total Sunday, October 3, 2010
  • Respondent profile | Total Sunday, October 3, 2010
  • Syndicated Banking Survey 9 in 10 respondents were the primary decision maker or 9% 37% 54% I am the sole decision maker on bank issues I take part in decisions on bank issues I am not at all involved in decisions on bank issues Base: All respondents (n=2788) Q. Which of the following statement best describes your role regarding personal banking in your household? | Sunday, October 3, 2010
  • Syndicated Banking Survey Demographics - 1/3 Average age: 35 yrs old Age Groups Gender 26 26 15 11 10 6 7 33% Up to 25 years years 35 years 40 years 45 years 50 years years 26 - 30 31 - 36 - 41 - 46 - 51+ 67% Male Female Nationality Emirate of Residence 47 51 36 24 20 7 9 5 1 Emirati Expat Arab Asian Westerner Other Abu Dhabi Dubai Sharjah Other Base: All respondents (n=2788) | Sunday, October 3, 2010
  • Syndicated Banking Survey Demographics – 2/3 Monthly Personal Income Average personal 35 income: AED 8,500 18 15 15 8 4 4 0 AED 5,000 or less5,001 to AED 10000 to AED 15,000 to AED 20,000 to AED 30,000 to AED 40,000 AED AED 10,001 AED 15,000 AED 20,001 AED 30,001 AED 40,001 and above not to answer Prefer Average household Monthly House hold Income income: AED 14,200 21 15 17 12 12 10 7 5 AED 5,000 or less AED 5,001 to AED 10000 to AED 15,000 to AED 20,000 to AED 30,000 to AED 40,000 and Prefer not to answer AED 10,001 AED 15,000 AED 20,001 AED 30,001 AED 40,001 above Base: All respondents (n=2788) | Sunday, October 3, 2010
  • Syndicated Banking Survey Demographics -3/3 Employment Profile 79 5 2 3 6 4 1 Working full time Working part Working part time per week) Full timeastudent (30 or more hours (8 - 29 hours (Less than 8 hours week) time per week) Full-time home-maker or housewife Unemployed Other Base: All respondents (n=2788) | Sunday, October 3, 2010
  • Thank You Rebecca Savard: rebecca@cashy.me www.cashy.me Scott Booth: scott.booth@yougovsiraj.com Joao Neves: joao.neves@yougovsiraj.com www.yougovsiraj.com Dubai, September 2010 | Total Sunday, October 3, 2010