In May 2022, IDnow commissioned YouGov to conduct a consumer survey of 1,000 UAE respondents. The purpose of the poll was to find out exactly what a customer wants during the initial stages of bank onboarding.
A representative range of people mirroring the demographics found in the UAE were polled, from various income brackets, nationalities, gender, age, marital status and residential location.
The higher the income, the stronger the desire for digital onboarding
More than three-quarters of those surveyed wanted their bank account opening processes to be digital.
Interestingly for wealth managers and banks handling high net worth and high value customers, the higher the income, the stronger the desire for digital onboarding. In fact, amongst those earning 25,000 dirhams (US$6,800) per month or more, 85% prefer a fully digital onboarding process. That represents upwards of 20% of the population in the UAE, with significant investment and spending power.
Digital identity verification preferred over physical branch attendance
Over 50% of those surveyed are less likely to apply for a bank account if they have to go to a branch to provide physical documentation or identity cards.
Banks that have digital identity verification processes in place could gain a significant competitive advantage over institutions that request attendance to a branch.
54% of people polled did not want to have to provide physical documentation or identity verification in-branch, but would rather prefer a digital alternative. Demographically, this sentiment was strongest amongst Western nationality expats, with 7 in 10 (69%) stating a preference towards not having to go into a branch to handover identity documents. Potentially this may be because digital identity verification and onboarding is standard in many Western countries, so there are higher expectations amongst this demographic for digital processes.
Severe disconnect between banks and their ability to serve customers digitally
86% of UAE non-bank account holders said they had started an application but gave up as the process was too complicated.
Of 1,000 people surveyed, 116 people said that they had started a digital bank account application but quit the process due to it being too lengthy and complicated. That’s an astonishing figure and shows a severe disconnect between banks and their ability to serve customers digitally. Incumbent banks are potentially missing out on up to 12% of the UAE population because their onboarding technology and processes are too complex and do not meet customer expectations for speed and convenience. Amongst UAE non bank account holders, 86% blamed poor onboarding for them not completing their application.
Customers prefer instant onboarding decisions from banks
75% of people are more likely to apply for a bank account that offers instant account opening, rather than waiting hours or days for a decision.
Banks that can provide instant or near-instant decisions on customer onboarding found favour amongst the consumers surveyed. Typically, UAE banks can take from a few hours to several days to accept a customer application - which in the eyes of the public is far too long. Once again, higher income earners (AED 25k+ pm) felt strongest, with 83% keen on instant account opening.
Banks are missing out on young people
29% of young people (18-24 years old) do not have a bank account of any kind.
Diving deeper into the results, the survey highlighted that banks are missing out on certain demographics. Primarily, young people (18-24 years old), were the major age group without a bank account. Nearly 3 in 10 (29%) of this age group did not have a bank account of any kind. While this could be partially attributed to a continued reliance on family accounts, the relative lack of financial independence amongst the UAE youth population compared to Western economies could be down to a number of factors.
The OECD outlines a variety of reasons across the MENA region such as youth employment status (World Bank data puts the youth unemployment figure in UAE between 7 to 9% over recent years), lack of financial literacy, and perception of need for financial services, amongst other possible causes. Young people in UAE are also highly connected via mobile internet penetration, so they may also be using other forms of digital payments without the need for a formal bank account.
The other significant finding amongst unbanked respondents, was a sizable proportion of Emiratis who did not have a formal bank account. 21% of Emiratis polled in the survey had eschewed the banking system for other forms of finance.
The top three pain points for UAE bank account holders were:
- 89% thought the approval process takes much more time than expected
- 88% felt there was too much bureaucratic paperwork
- 82% were dissatisfied with the need to physically go to a branch and apply or hand over identity documents
Nearly 9 out of 10 UAE bank account holders think approval processes for accounts take too much time and require too many details and documents. More than 8 out of 10 were dissatisfied with needing to physically go to a branch and apply or hand over identity documents in person. Nearly 9 out of 10 UAE non-account holders had started an application but gave up as the process was too difficult and lengthy. Almost 8 out of 10 said they could not provide the required identity documents to the bank. Around 6 out of 10 without a UAE bank account gave up on their application as they did not feel it was safe or secure enough.
59% of people who do not have a bank account did not feel the onboarding process was safe or secure enough.
The top answer for not setting up an account was finding the process too complicated
For those who did not hold a UAE bank account, a variety of reasons were given for not completing an account set-up. The data shows there is a clear opportunity for banks to streamline applications and simplify onboarding.
Similarly, it appears that banks are requesting documents that are difficult for applicants to attain. Enabling a simpler way to upload documents for verification could also result in greater customer capture. Arguably most importantly, 59% of people who do not have a bank account did not believe the onboarding process was safe or secure enough. This could be due to a number of perceptions. Typical examples of wariness around bank security and safety include: physically or electronically sharing documents that are then not saved or stored securely; providing personal information to junior-level bank staff; belief that bank technology systems are not properly secure or at risk of hacking; and the overall resilience of banks in the event of downturns and the risk of losing money if the institution collapses.
Prioritizing world-class standards in verification, security and account protection could help to alleviate many of these concerns.
Quick takes
- Consumers want simple, quick and digital onboarding processes that provide instant account approvals and access
- Banking customers don’t want to have to provide identity documents for verification in person - they’d prefer digital identity verification that can be done remotely
- UAE residents within higher income groups have higher expectations regarding speed and convenience of account opening
- Banks need to highlight the advantages of holding an account to missed demographics such as youth and Emirati populations
News Source: IDnow
