Expats Shun UAE Banks To Send Cash Offshore

Expats are shunning banks in the United Arab Emirates in favour of keeping their cash back in their home countries. Almost half of expats questioned for a survey stated they preferred banking their cash outside the UAE as they had more confidence in banks that they know at home. UAE banks have around £63 billion on deposit, according to the latest central bank figures, but this is a tiny amount compared with wealth held by expats. The report found 48% of expats lacked confidence in UAE banks. Jon Richards, CEO of UAE consumer web site compareit4me.com, which carried out the study, said: “The banks are really missing a trick when you drill down into the figures. “Banks really need to do much more to make their services attractive to expats.” Better incentives The survey revealed that two-thirds of expats agreed that they save between 10% and 50% of their tax-free salaries each month. “This amounts to millions of pounds leaving the UAE each year and suggests that local banks have the opportunity to address a huge market that they are overlooking,” said Richards. Richards argues that banks in the UAE need to devise accounts that give expats some incentive to leave their money in the country. One of the issues, says Richards, is many expats are comfortable with redress and compensation schemes offered in the European Union and many offshore financial centres, like the Isle of Man, Channel Islands and Gibraltar. Even more money is likely to leave the UAE as the economy steps up in gear. Fast-growing economy The emirates are set to become a major financial and business centre for the Middle East, with a fast-growing economy fuelled by the upcoming Expo 2020. Dubai is becoming a major international hub. The airport expects to handle 70 million passengers a year by 2020 and major investors are looking at opening centres of excellence. Google has just announced starting a Google for Entrepreneurs tech hub in Dubai – the company’s first major venture into the Middle East. The city’s flagship Astrolabs entrepreneur training program helped launch more than a thousand businesses across the UAE, Saudi Arabia, Egypt, Jordan, and Lebanon last year. “Entrepreneurs and expats want safe and certain banking, but they are looking offshore rather than in the UAE for these services,” said Damian Hitchen of Swissquote Bank. “The demand for banking services is growing at a huge rate and more protection for consumers with money in local banks looks to be the only way of stemming the problem of expats remitting their savings overseas.”