89% of UAE consumers will opt for digital banking services over visiting a physical branch post COVID-19 

Consumer appetite for digital banking services continues to grow in the UAE, accelerated further by the COVID-19 pandemic, according to a new survey conducted by Backbase with YouGov.

Eighty-nine per cent of respondents to the survey said that they are now more likely to opt for digital banking services rather than make a physical visit to a bank branch, with consumers saying they prefer digital self-service banking solutions delivered with the same convenience as their e-commerce, entertainment, and transport solutions.

Movement restrictions or closures of bank branches in the early days of the pandemic forced consumers online, and banks responded by rapidly shifting products and services to digital platforms. The research showed that 72% of respondents say that they use digital banking services at least once a week, and 24% uses services once a day or more.

The sudden increase in digital adoption has dramatically advanced the digital transformation agendas for many banks in the region, with banking leaders recognizing online banking services as becoming critical to increasing customer retention and growing revenue streams through personalized services. Consumer expectations from digital banking have shifted from just day-to-day banking services and transactions, to also include more complex interactions, such as remote account openings or subscriptions to new products or services such as getting a loan or subscribing to insurance. However, 31% of respondents say that their bank is weak when it comes to offering seamless access to online banking services, highlighting an area where banks need to step up their performance.

According to Backbase, many banks have relied on rolling out standalone applications and self-contained systems to add new functions and services to their online banking offerings, creating fragmented systems that don’t deliver a good experience to customers. With further digital transformation ahead, financial institutions need to ensure that they have the right platform to manage future expansion.

“As the pandemic recedes, banks have the opportunity to provide enhanced customer engagement online, which will pave the way for physical branches to only deliver more complex, high-value activities. To make sure that they can capitalize on changing customer behavior, banks will need to break free from siloed technology architecture and bring engagement to the forefront of their digital operations. By adopting the single platform approach to technology that other industries have already mastered, financial institutions can be leaner and more flexible, with the ability to instantly execute new digital services while also providing enhanced customer support,” said Matthijs Eijpe, Regional Vice President Sales EMEA at Backbase.

Customer experience differentiates successful digital financial services from failures with 44% of respondents citing poor customer relations as a key influencing factor in making the decision to switch to a different bank.

“Collaboration with a partner that accelerates the shift to engagement banking and manages change across the entire digital journey enables financial institutions to focus on providing a high-quality service to customers and members. Our state-of-the-art digital banking software solution unifies data and functionality from traditional core systems and new fintech players into a seamless, digital customer experience,” continued Matthijs Eijpe.