LONDON: Emirates NBD inspires more customer loyalty than other UAE banks and has the highest trust levels in the country according to a new report released on Thursday.
The Bank Brands Customer Loyalty Market Research report, published by London-based Brand Finance explores changing customer opinions across 22 markets.
Based on feedback from 19,000 respondents, the report identifies those bank brands most likely to lose customers to the competition.
In the UAE, 34 percent of First Gulf Bank’s customers stated that they were “very likely” to leave the bank, a higher proportion than any other bank brand in the country.
“The data was gathered after the merger with the National Bank of Abu Dhabi was announced but before it was completed, demonstrating the impact that M&As and associated risk may have on perceptions of a brand and therefore on customer loyalty,” said Andrew Campbell, regional managing director at Brand Finance.
Emirates NBD came out top, with 81.8 percent of its customers declaring their trust in the brand and 36 percent stating that they were unlikely to switch to the competition.
It was also the most popular bank among customers looking to leave their current wealth managers, with 15.4 percent of respondents choosing Emirates NBD over other brands.
“In general, the UAE banking market is more flexible when it comes to customer preferences than some of the long-established banking markets, especially Switzerland, the US, or Britain,” said Campbell.
Growth market customers are generally more likely to switch between bank brands, with more than a quarter ready to try banking with the competition in the UAE.
The changing landscape of banking since the global economic downturn has shifted the balance for big brands as fintechs and niche challenger banks bite into their profits and lure customers away with the promise of superior service and lower prices.
Established banks, which have traditionally relied on established customer loyalty rather than rapid innovation across their products and services, have faced mounting pressure to keep up.
This includes keeping pace with digital banking developments. “The banks that are slow to adopt new technologies risk losing their customers’ trust and pushing them to switch to more technology-savvy competitors,” said Campbell.
“Customer-friendly digital banking used to be an extra service that could help bank brands get ahead of their competitors in the race for attracting new customers among millennials. These days, this is a given,” he added.
With the rise of bank fraud and identity theft a major concern for many UAE customers, security is another key criteria for establishing loyalty.
“Those bank brands that firstly provide robust internet security and secondly walk the extra mile to communicate with their customers and demonstrate their readiness to help those that fall victim to scams, can be perceived as more trustworthy and not only retain current customer base but also broaden it,” Campbell said.
The report shows which have fared best across the board, with Abu Dhabi Islamic Bank followed by Abu Dhabi Commercial Bank scoring second and third respectively in terms of customer loyalty, while Dubai Islamic Bank and the National Bank of Abu Dhabi were identified as the most popular banks after Emirates NBD.
Mashreq and RAKBANK were near the top of the table in terms of customers most likely to switch, scoring 29.9 percent and 29.1 percent respectively.
Brand survey reveals loyalty levels among UAE banks
Brand survey reveals loyalty levels among UAE banks
Related
Global brands shut Middle East stores as conflict causes chaos
- Luxury brands and retailers close stores in Middle East
- Conflict threatens the region that has been luxury’s fastest growing
- Mass-market retailers monitor situation, adjust operations in region
PARIS: In Dubai and other major Middle Eastern shopping hubs, many stores are closed or operating with a skeleton staff as the escalating conflict in the region causes chaos for businesses and travel.
The US-Israeli air war against Iran expanded on Monday with no end in sight, with Tehran firing missiles and drones at Gulf states as it retaliates for a weekend of bombing that killed Iran’s supreme leader and reportedly killed scores of Iranian civilians, including a strike on a girls’ primary school.
Chalhoub Group, which runs 900 stores for brands from Versace and Jimmy Choo to Sephora across the region, said its stores in Bahrain were closed, while other markets, including the UAE, Saudi Arabia, and Jordan remained open though staff attendance was “voluntary.”
“We operate with a lean team formed of members who volunteered and feel comfortable to come to the store,” Chalhoub’s Vice President of Communications Lynn al Khatib told Reuters, adding that the company’s leadership team personally visited Dubai Mall and Mall of the Emirates on Monday morning to check in with workers.
E-commerce giant Amazon closed its fulfillment center operations in Abu Dhabi, suspended deliveries across the region and instructed its employees in Saudi Arabia and Jordan to remain indoors, Business Insider reported on Monday, citing an internal memo.
Gucci-owner Kering said its stores were temporarily closed in the UAE, Kuwait, Bahrain and Qatar and it has suspended travel to the Middle East.
Luxury growth engine under threat
Shares in luxury groups LVMH, Hermes, and Cartier-owner Richemont were down 4 percent to 5.7 percent on Monday afternoon as investors digested the knock-on impacts of the conflict.
The Middle East still accounts for a small share of global spending on luxury — between 5 percent and 10 percent, according to RBC analyst Piral Dadhania. But the region was “luxury’s brightest performer” last year, according to consultancy Bain, while sales of expensive handbags have stalled in the rest of the world.
Now, shuttered airports have put an abrupt stop to tourism flows into the region and missile strikes — including one that damaged Dubai’s five-star Fairmont Palm hotel — are likely to dissuade travelers, particularly if the conflict drags on.
“If you assume that it’s a $5 billion to $6 billion (travel retail) market and let’s say it’s going to be shut down for a month, we are talking about hundreds of millions of dollars that are definitely at risk,” said Victor Dijon, senior partner at consultancy Kearney.
If Middle Eastern shoppers cannot travel to Paris or Milan, that could also hurt luxury sales in Europe, he added.
Luxury brands have been investing in lavish new stores and exclusive events across the region. Cartier unveiled a “high-jewelry” exhibition in Dubai’s Keturah Park just days before the conflict started.
Cartier and Richemont did not reply to requests for comment.
Luxury conglomerate LVMH has also bet big on the region. Last month, its flagship brand Louis Vuitton staged an exhibition at the Jumeirah Marsa Al Arab hotel, and beauty retailer Sephora launched its first Saudi beauty brand.
LVMH does not report specific figures for the region, but in January Chief Financial Officer Cecile Cabanis said the Middle East has been “displaying significant growth.” LVMH did not reply to a request for comment on how its business may be impacted by the conflict.
The Middle East has also attracted new investment from mass-market players. Budget fashion retailer Primark said in January that it plans to open three stores in Dubai in March, April and May, followed by stores in Bahrain and Qatar by the end of the year.
“Primark is set to open its first store in Dubai at the end of March but clearly this is a fast-moving situation which we are monitoring closely,” a spokesperson for Primark-owner Associated British Foods said.
Apple stores in Dubai will remain closed until Thursday morning, the company’s website showed, while Swedish fast-fashion retailer H&M said its stores in Bahrain and Israel are closed.
Consumer goods group Reckitt has told all employees in the Middle East to work from home, temporarily closed its Bahrain manufacturing site and suspended all business travel to the region until further notice.
