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Banks swap bricks and mortar for clicks and torture

Fuelled by the ill effects of the Covid pandemic, everything in retail banking has gone digital

Mashreq bank branch closure Reuters/Mosab Omar
Mashreq Bank has closed more than 60 branches in the UAE in the past three and a half years, leaving it with just seven across he whole country

I was making small talk before an interview with executives from Mashreq Bank when Amith Rajan, Mashreq’s head of wholesale banking and NEOVentures, put me on the spot.

The bank had 68 branches across the UAE when he joined more than three and a half years ago, he said. Could I guess how many it had now? “200?” I hazarded. “300?” Try again.

“Seven,” he replied.

That is seven bricks-and-mortar outlets across a network that stretches the length and breadth of the UAE. To put that in some perspective, there are more than seven Starbucks outlets in Downtown Dubai alone.

Fuelled by the ill effects of the Covid pandemic, everything in retail banking has gone digital. Mashreq is not alone. In the UK last year, an estimated 636 bank branches closed, while Roland Berger expects 11,000 bank branch closures in south-east Asia by 2030.

I cannot remember exactly when I last visited a bank. But I know I had to drive there, take a ticket and wait in a queue for a machine to announce an accumulation of letters and numbers that matched the ticket before I could speak to a teller.

Paying your bills on the go

Is it easier to do your banking from your computer or smartphone than to trek to a branch? Of course it is. I have transferred money from my couch and while on the tram. I’ve even paid my credit card bill from the top of the world’s tallest building.

Mashreq has 12 electronic banking service units, an extension of the traditional branch, where people who do not have access to digital banking can go to complete transactions. But what happens when things go awry?

The Dubai fintech Zbooni has just published a survey that found nine out of 10 people in the UAE prefer genuine human customer support from businesses to chatbots or generative AI.

Despite my reluctance to visit a branch, I have my feet firmly in this camp.

By the time you have typed 1 for this and 2 for that, and repeated that ad nauseam, when you finally reach someone to talk to, you may have forgotten why you called in the first place. Or, more likely in my case, you are so frustrated by the process that the poor person responding from the call centre gets both barrels.

There is much to be said for speaking to someone face-to-face, particularly in the Middle East, where building relationships is crucial to building trust

This presents banks with a considerable challenge. We do not visit branches. But we want them there just in case. Branch closures make that much more difficult.

A 2023 survey by Accenture of 49,000 bank customers from around the world found 36 percent said they had problems getting human support when they needed it.

There is also much to be said for speaking to someone face-to-face, particularly in this part of the world, where building relationships is crucial to building trust.

The UK has adopted a “hub” approach, where multiple banks are able to use a shared space at the local Post Office, allowing customers to deposit and withdraw money and speak to a trusted representative from their bank on a specific day.

Mashreq, the emirate’s oldest bank, has always placed great faith in the power of innovation and technology. It was the first bank to introduce credit cards to the UAE and installed the country’s first cash machines.

Joel Van Dusen, group head of corporate and investment banking at Mashreq, said that in 2023 the lender made just short of AED100 million ($27 million) on new ideas generated by machine learning models.

I doubt any of those new ideas included opening more branches. How will its customers react?

Gavin Gibbon is senior editor at AGBI

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