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UAE expats desert local banks for home country bank security
| Published: | 14 Oct at 6 PM |
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A recent survey indicates that expats living and working in the UAE are shunning the emirates’ banks in favour of the security offered by their home country financial institutions.
Almost 50 per cent of those surveyed admitted that their wages and savings were paid into accounts held in home country banks. The reason given by 48 per cent of respondents was a lack of confidence in local UAE banks and the security of knowing their cash was safe under all circumstances.
Although UAE banks hold some £63 billion on deposit, according to the emirate’s central bank the amount held by expat workers makes up a minuscule proportion of the total. The survey, initiated by a popular UAE consumer website, indicated that local banks are missing out by not making their products appealing to expats.
Over 66 per cent of expats who took part in the survey are saving between 10 and 50 per cent of their monthly tax-free salaries, meaning that millions of £ sterling are leaving the UAE on an annual basis. Jon Richards, owner of the consumer website, told local media that UAE banks are ignoring a huge market.
Richards believes that, should local banks put together accounts aimed at expat savers, many more would use their services. He adds that expats are more comfortable with the compensation and capital protection laws in place in the UK and its offshore financial jurisdictions.
Given that the emirates are fast becoming the Middle East’s major business and financial hub with the help of the upcoming EXPO 2020, local banks are lagging behind the trend. Major investors are exploring local possibilities and Dubai is ramping up its international importance, thus creating a huge demand for banking services including consumer protection.
Almost 50 per cent of those surveyed admitted that their wages and savings were paid into accounts held in home country banks. The reason given by 48 per cent of respondents was a lack of confidence in local UAE banks and the security of knowing their cash was safe under all circumstances.
Although UAE banks hold some £63 billion on deposit, according to the emirate’s central bank the amount held by expat workers makes up a minuscule proportion of the total. The survey, initiated by a popular UAE consumer website, indicated that local banks are missing out by not making their products appealing to expats.
Over 66 per cent of expats who took part in the survey are saving between 10 and 50 per cent of their monthly tax-free salaries, meaning that millions of £ sterling are leaving the UAE on an annual basis. Jon Richards, owner of the consumer website, told local media that UAE banks are ignoring a huge market.
Richards believes that, should local banks put together accounts aimed at expat savers, many more would use their services. He adds that expats are more comfortable with the compensation and capital protection laws in place in the UK and its offshore financial jurisdictions.
Given that the emirates are fast becoming the Middle East’s major business and financial hub with the help of the upcoming EXPO 2020, local banks are lagging behind the trend. Major investors are exploring local possibilities and Dubai is ramping up its international importance, thus creating a huge demand for banking services including consumer protection.
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