Evolving customer demands driving transformation in UAE banking sector

The UAE’s banking sector is undergoing a rapid transformation, balancing its established financial foundations with the demands of an increasingly digital world. A report from New Metrics surveyed 600 consumers in order to gauge how evolving customer demands are driving change and progress.

In line with the UAE Centennial 2071 vision, the banking industry is evolving for the better, driven by local market dynamics, customer behavior, and rapid technological adoption. Conventional, Islamic, and neo-banks are the key players in this evolution, each with their own unique opportunities and challenges.

Conventional banks lead the digital charge

Conventional banks, like Emirates NBD, form the backbone of the UAE’s financial landscape. Built on trust, accessibility, and comprehensive services, they benefit from extensive branch networks and strong customer relationships.

These institutions are now at the forefront of digital transformation, integrating cutting-edge technologies like blockchain and AI to enhance security and streamline operations. Emirates NBD exemplifies this trend, successfully leveraging advanced tools to maintain its competitive edge.

Islamic banking, however, has also begun to play a significant role in the UAE market. Institutions like ADIB are carving a niche in ethical finance, appealing to a growing segment of customers seeking Sharia-compliant products and services.

Source: New Metrics

Disruption from neo-banks

Then there are neo-banks, such as Mashreq Neo, which are reshaping customer expectations with their mobile-first approaches and tailored digital offerings. These digital disruptors have resonated with younger, tech-savvy demographics and are putting pressure on traditional players to keep pace with their innovation.

Operating within a mature digital ecosystem, UAE neo-banks face the challenge of not only offering innovative solutions but also matching the reliability and comprehensive services of established banks. Seamless integration between digital platforms and in-person services are crucial for success in this market.

Conventional banks still dominate in brand awareness and market penetration, said New Metrics, leveraging their long-standing reputations. Neo-banks, however, are gaining traction, particularly among digitally native customers. While conventional banks maintain an edge in overall customer loyalty through superior service quality and innovative loyalty programs, neo-banks are showing promising growth in digital loyalty.

Source: New Metrics

Security and sustainability

Security remains a key concern for banking customers in the UAE. Most banks are actively investing in cybersecurity measures and communicating their practices to build trust. In fact, the New Metric study found that UAE banks have a very high 90% confidence rate, compared with the global average of 67%.

UAE banks have also deeply integrated ESG initiatives into their…