Majority of UAE residents surveyed by compareit4me.com, a UAE-based finance comparison website, said they put their money in local banks.
Fifty-two per cent of respondents of the annual survey, which seeks to measure consumer finance habits, claimed they are more confident with banking systems in the UAE.
Jon Richards, chief executive officer of compareit4me.com, said the results indicate that UAE financial institutions are trustworthy enough but they have to do more to convince the rest of the residents to keep their savings onshore.
“When you look at the results, a significant number or 65.5 per cent of the survey respondents claimed to be saving between 10 and over 50 per cent of their salary every month. With millions of dirhams leaving the country every year, there appears to be huge potential for UAE banks to attract regular savers,” Richards added.
The banks need to work with the Central Bank of the UAE to look at initiatives that will incentivise expat workers to keep money earned here in the country. At present, nearly half of the expats feel more comfortable saving with banks in their home country as they understand the system and feel comfortable with banking regulations. Accounts in the Isle of Man are protected by the Compensation of Depositor Regulations. Damian Hitchen, sales director for the Middle East and Asia at Swissquote Bank, said: “Expatriates in the Mena are increasingly looking for safe, easy-to-use and flexible offshore banking and investment providers. Based on the growth of our expat account alone in 2014 we see a big demand for assets held outside the region, giving them a centralised account for their global savings that are accessible round the clock.” Despite the large number of residents sending money abroad, renewed economic confidence in recent years has seen UAE banks flush with liquidity. According to the UAE Central Bank, total bank deposits of UAE banks climbed by 1.4 per cent year-on-year in June to Dh1.4 trillion ($381 billion).
“Instituting proactive financial service reforms will be a critical step towards encouraging expats to keep their money in UAE banks. Providing transparent mechanisms that protect depositors will undoubtedly increase deposits with local banks giving them greater access to retail funds. This will lead to cheaper forms of credit while strengthening the resiliency of UAE’s financial sector during times of crisis.” said Richards.© Copyright - Khaleej Times