cashy YouGov Siraj financial habits study English

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

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Executive Summary

| Total



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.

|



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.

|



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

|


Background & methodology

| Total



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.

|


UAE banking profile

| Total



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)

|



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)

|



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

Q. Which of the following financial products / services do you currently use? (Please select all that apply)

|



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)

|


Current Main Bank

| Total



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)

|



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%

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.
|



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.


| Q. How likely are you to recommend your main bank to a friend or colleague?



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
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 ?

|



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

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 - …………..?
|


Credit card usage

| Total



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

Q. How many Credit cards do you currently own?
Q; How many of your credit cards are….?
|



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?



‘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)?
|



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?



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?

|


Loans

| Total



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

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?



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?

|



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?

|


Islamic banking

| Total



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

Q. Do you presently use Islamic banking products and services?
| Q. Which of the following Islamic banking products/services do you presently use?


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?


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?


Appendix

| Total


Respondent profile

| Total



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


Q. Which of the following statement best describes your role regarding personal banking in your household?

|



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


|



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


|



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


|


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


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