Nearly three quarters of affluent middle class consumers in the UAE do not see the value in bank reward programmes, don’t find the benefits interesting and don’t feel they can accumulate sufficient points to redeem rewards, a report said.

A large proportion (58 per cent) only have a basic main bank account with no fees but also no added benefits and 60 per cent have credit cards that lack benefits such as cashback or air miles, added the study conducted by Collinson Group, a global leader in shaping customer behaviour to drive revenue and value for clients.

This highlights an opportunity for banks and card providers in the region to differentiate themselves and offer additional services such as insurance, assistance and travel benefits.

The study found that while customers in the UAE are more satisfied with their banks than the other countries surveyed, they don’t feel rewarded or recognised for their loyalty and look elsewhere for additional financial services.  Nearly two thirds of customers in the UAE (63 per cent) feel more loyal to brands that provide access to rewards and 63 per cent feel more loyal to companies which offer more personalised offers and communications.

As a result, retail banks and credit card providers in the UAE are missing out on the opportunity to create powerful advocates and attract repeat business from loyal customers.  Affluent middle class consumers in the UAE who feel loyal to a brand are prepared to recommend a bank or credit card provider to their friends and family (67 per cent), 64 per cent would be willing to purchase more products from them and 52 per cent will pay a premium to use a service, even if it is more expensive.

Banks are losing their position as a ‘one-stop shop’ for financial services, with savvy consumers choosing a range of financial service providers.  Customers are increasingly looking elsewhere for additional services, according to the study.

Mark Roper, commercial director, Collinson Group said: “Whilst the majority of customers in the UAE are satisfied with their banks, the emergence of alternative providers of financial services and the number of customers on more basic bank and credit card services, highlights the opportunity to retain and grow a portfolio of services with those within the top 10-15 per cent of income.  Customers see their accounts as a necessity but don’t feel they offer additional value or reward.”  

“Our research found that not being rewarded for loyalty is the biggest frustration for consumers, as cited by two thirds of respondents globally, ahead of poor interest rates and charging unnecessary fees.

“Many banks offer standardised, transactional loyalty programmes which rely on traditional points-based rewards. Less than half of affluent middle class consumers are currently members of bank loyalty initiatives and this group are more likely to be members of supermarket, airline, credit card and hotel loyalty programmes ahead of banks, where these programmes offer greater value and appeal.

“With increased competition in the sector, encouraging the most valuable customers to become active members of loyalty programmes can be a powerful tool in improving satisfaction, retention and achieving repeat business,” Roper added.

Personalised and consistent communications regardless of how customers choose to interact with a bank is also important for the affluent middle class. The study has found that customer engagement improves by a third amongst individuals who ‘feel known’ by their bank and a further third for those who say they receive a consistent multichannel service – whether in person, by phone or via digital channels.

Collinson Group research has previously highlighted how today’s affluent consumers place a higher priority on family, altruism and enriching experiences ahead of short-term satisfaction and this is reflected in their expectations of banks.  Nearly two-thirds in the UAE (58 per cent) expect their banks to be ethical.

“Banks need to act now to protect their current revenue.  Middle class mass affluent consumers are increasingly mobile and expect more from their banks,” said Roper.

“Transparent, ethical behaviour is important and financial services organisations also need to demonstrate the value of their loyalty programmes to encourage active participation.  Personalised, aspirational and more lifestyle orientated benefits and rewards, which are more accessible to earn and redeem will enable banking brands to differentiate themselves and attract and retain the most affluent consumers,” he concluded.

Roper will be delivering a keynote presentation at the Middle East Banking Innovation Summit in Dubai on September 14. – TradeArabia News Service