Emirates NBD expects about 90 per cent of customer transactions to be done outside of branches in the next three years as it spends more money on its mobile and online applications.
While ATMs, phone banking and digital applications in recent years have pushed that figure to about 80 per cent, online mobile banking is expected to boom, said Suvo Sarkar, the head of retail banking at Emirates NBD.
He would not specify how much was being spent on digital technology but said the bank was saving millions of dirhams a year as a result of more automation.
“Smartphone penetration in the UAE is one of the highest in the world at 78 per cent, and internet penetration is more than 75 per cent, so we clearly live in a country where online mobile banking will rapidly become the preferred banking preference for customers,” Mr Sarkar said.
About 36 per cent of clients use the internet or mobile applications to transfer money, pay bills and communicate with the bank, Mr Sarkar said. Mobile banking constitutes about half of the usage, he said.
Going digital has been a win-win situation for banks, with customers getting convenience and speed while banks save money. About 800 million customers globally use mobile banking, and that is expected to more than double to 1.7 billion users in the next five years, according to the executive.
The bank has been proactively increasing the functionality of its app, adding services such as being able to deposit a cheque by scanning and sending it through a phone, and reserving a place at a bank cashier by mobile.
So far the strategy has worked. The bank said mobile transactions have grown 30 per cent every year since the app was launched in 2013. This year alone, the bank said it expects 3 million transactions through its app.
Part of the bank’s focus on mobile technology is because its consumer banking division is becoming more profitable.
The lender, the biggest in the Middle East in terms of assets, said in April that its first-quarter profit jumped more than 60 per cent as it made more money from retail customers through credit cards and international money transfers.
Yet despite the success of mobile banking, Mr Sarkar is adamant that bank branches are here to stay in the UAE even as they shrink in many parts of the developed world.
“What we are doing today for branch expansion is that we are doing it more selectively,” Mr Sarkar said. “The branches are much smaller in size than they were ten years ago. They are in geographies where our customer base is growing, so we still need them. The bank branch remains an integral part of the bank’s strategy. That is where relationships are made. Branches for a market like this are going to be here forever.”