I took part in a webinar the other day focused on the developments in digital banking in the Middle East. Having visited Abu Dhabi, Bahrain, Dubai and Qatar recently, I can claim to know a little. Equally, having been to the region regularly since 2002, I’ve seen how it’s developing and changing. This is illustrated well by these two charts, which illustrate the demographics of the GCC (Gulf Cooperation Council, like the EU for the Middle East) countries in 2016:
and 2012 …
The market is a very mixed one of a minority of nationals in many countries of the GCC, a large number of Asian migrants (especially Indian due to the wide range of construction works), along with expats from other Arab countries as well as many from Europe and America. It’s a vibrant world that changes almost every day. For example, the Dubai Canal has appeared recently. It’s a three-kilometre-long canal through the centre of the city, built in just 18 months. Imagine any other major city ripping itself through the centre in a major construction project in such a short period of time. It just illustrates the market well, and has an attitude of just do it. More on that in other blogs, as the focus of this one is the market diversity.
During the webinar, it hit home that looking at these demographics, you have a small number of ultra-high-net-worth individuals (UHNWI)* who expect service beyond anything. Imagine you’re a billionaire with a bank account: you never go to the bank – the bank comes to you. You never ask for anything, you just expect it to be done. You never need to check your balance, as someone does that for you.
A good way to illustrate this is through former UK chancellor George Osborne’s brother, who runs a UHNWI concierge service:
“Our potential clients are quite time-poor, so we’re like a support system, providing everything from a last-minute private jet to a Friday night table at Zuma. Like that. I have access to all the Grands Prix, tickets to the Oscars, paddock passes, backstage passes. Some companies will organise tickets to go and see Bon Jovi or whatever, but we organise passes to go backstage to meet him. It’s anything you want.”
These are the customers that banks need to reach digitally and physically, at their beck and call 24/7.
There’s then a whole raft of bankable customers, many coming from overseas, who have been used to the service of a Citigroup, HSBC or CBA. These customers are probably pleasantly surprised by the service they receive from an Emirates NBD or NBAD (National Bank of Abu Dhabi). I liken it to the difference between flying British Airways or American Airlines and Etihad, Emirates and Qatar Air. It’s like being in an old, battered black or yellow cab (depending on the city) and switching to a luxurious limousine that’s shiny and new. The Middle Eastern airlines are fleets of A380s that are amazing. The BA and AA aircraft tend to be a little old and tired, as are their staff.
There’s then another mass of population, many from Asia, who are called migrants rather than expats. Expats are viewed as professionals; migrants are generally unskilled and have moved to the GCC for work. As illustrated by the Dubai Canal, there’s plenty of it. Across most of the GCC, but particularly in UAE, Bahrain and Qatar, you’ll see crane after crane after crane in the sky. These aren’t the crane birds, but the metal cranes of construction. Hundreds of them are erected every day to build new offices, apartments and hotels. It’s nonstop, and is the reason why the population is doubling every few years in these countries.
The net-net is that you have a rapidly growing economy with a mix of young migrant workers who need remittance services, another group of professionals who expect mass affluent services, and a small group of high net worth and ultra-high net worth individuals who take exceptional service for granted. It’s an interesting place to be a bank.
Meanwhile, if you’re interested in the slides from the webinar, you can check them out here:
READ NEXT: What do wealthy customers want?
– This article is reproduced with kind permission. Some minor changes have been made to reflect BankNXT style considerations. Read more here.