DUBAI: Banks in UAE will continue to pivot to digitisation, cutting reliance on traditional brick-and-mortar infrastructure to gain new customers as they look to control costs in changing industry dynamics, consultancy Alvarez & Marsal said.
UAE lenders are mimicking their peers in Europe, where large financial institutions have gained more customers through their neo-banks -- digital lenders without physical presence – than they have managed to gain through traditional branch networks, said Saeeda Jaffar, managing director and co-head of Middle operations at A&M on Monday, report agencies.Dubai-based lender Mashreq Bank has explicitly said it intends to reduce its conventional branches by half in the UAE but there are other large banking institutions that are also pursuing the same path, she noted.
“Mashreq is the first one to very openly say that [it will close branches] but if I look at the other large banks, there have been branch closures….. we have seen this happen, perhaps [it will happen] a little bit more organically and softly in the UAE market,” she said.
“Do we think this will continue? Yes. This is a natural trend as customers choose not to go to a branch …. and that’s something the banks will have to cater to.”