Kuwait citizens pile on pressure for e-banking
Almost 20% of customers in Kuwait will shift their accounts if their current bank fails to offer online banking services. An additional 58% of customers would open a second account, concludes a new study.
A recently published report from Kuwait found that almost 20% of customers in the Emirate will shift their accounts if their current bank fails to offer online banking services. An additional 58% of customers would open another account, stated the study, which was conducted in the fourth quarter of last year by the Institute of Banking Studies.
Over 750 people were canvassed for the study, the majority of which were drawn from the IT and business sector. While this may have skewed the results in favour of Internet banking, the Kuwaiti banking community is not going to sit back and wait for these high net worth individuals to flee. “Banks must introduce a mix of services,” said Jasem Safar, head of automation services at Al Ahli Bank in Kuwait. “Banks must re-engineer their systems and staff and be ready for e-banking,” he added.
The most popular banking services, according to the survey are checking balances, checking account statements, and paying bills.
Customers may be gravitating towards e-banking in Kuwait, but concerns over security may slow the pace of migration away from traditional face-to-face services. The IBS study found that over 70% of customers believed there was a high or moderate risk associated with using e-banking services.
Education is key to overcoming these fears, suggested Safar. People need to carefully compare the risks that they are taking every day in the physical world to the risks of transacting online. There is no such thing as 100% security, but the risks of fraud or abuse online are lower than in the physical world, he added.
Kuwait is further advanced with e-banking than any other country in the GCC. NBK, Al Ahli and Burgan Bank have all rolled out multi-channel banking strategies over the past three years. The market has been protected from foreign competition in the banking sector and this has given local banks sufficient volume of business to justify investment in e-banking.