Sunday, May 04, 2014
Dubai: As the retail banking business in the UAE is set for an average 10 per cent per year asset growth, the retail business margins are expected to come under squeeze due to potential rise cost of funds and rising competitive pressures in the market.
“While banks are seeing definite margin compression, customers are benefiting from finer pricing, more value added services, and better service,” said Suvo Sarkar, General Manager — Retail Banking & Wealth Management of Emirates NBD.
While undercutting prices is not an option for Emirates NBD, the bank is counting on value added services and innovation reach to retain customer loyalty.
“Innovation has always been a core component of our values, and will continue. The DirectRemit proposition is one example of how we focus on addressing customer needs by facilitating remittance into our partner bank account almost instantly, or to any bank in the destination country within an hour at zero cost,” said Sarkar
The bank has launched this innovative product for the India corridor first, and has plans for other corridors in the next few months. Remittances are a key element of retail business given the large expatriate customer base which on average remits between 4-9 times a year. The bank offers remittances in all major currencies supported by a multichannel platform, segmented pricing and preferential foreign exchange rates. Emirates NBD is currently offering free online remittances to its retail customers. In fact over 70 per cent of the bank’s low value remittances today are sent through the lender’s online and mobile channels.
Impulse saving
Similarly the bank’s recently launched Shake n’ Save product represents a new frontier of mobile-only products in the UAE. “While the UAE is known for impulse spending, we are trying to inculcate the habit of ‘impulse saving’ through Shake n’ Save. You will see us launching more innovation in the months to come,” he said.
Emirates NBD has been investing heavily in technology in its retail business such as the Interactive Teller Machine, Tablet based financial planning, a Mobile banking platform that has over 100 functionalities, and a fully new CRM (customer relationship management) system. The bank believes that the short terms costs surge associated with these initiatives are expected to more than compensate in terms of return on investment. “We look at technology as key enabler for our business. All investments in technology should help us to either reduce cost to serve or increase revenue per customer. All these investments are helping to drive our cost income ratio down for the retail business,” Sarkar said.
By Babu Das Augustine Deputy Business Editor
Gulf News 2014. All rights reserved.
