We arrived in Dubai at around 7 a.m. were blasted by the heat. It was 90 degrees when we landed and got up to about 110 degrees by lunchtime. 

The amount of construction in Dubai is simply staggering; everywhere you look is a new skyscraper being built. In fact, we read in the local newspaper that six buildings with more than 100 stories (one twice the height of the Empire State Building) are currently in either the construction or planning stages.

Our first stop was a branch of one of the top five banks in the country. This branch was one of the largest and busiest we have ever seen. At least 25 people worked in the office and there must have been about 30 customers in the building when we were there. What was particularly interesting was how the bank managed customer expectations with respect to the wait time to see a teller or a personal banker. Upon entering the branch, customers obtain a ‘token’ from a dispensing device located near the entrance that assigns them a spot in line. The customer is then free to sit in the large waiting area (which must have had about 30 - 40 chairs) to wait their turn. An LCD monitor hanging from the ceiling displays each customer’s place in the queue.

Interestingly, the bank’s premium customers are bumped up in the queue ahead of mass-market customers. We thought this is a concept that U.S. banks should experiment with.

This branch was more the exception than the norm from what we saw during our two-day visit. Some of the larger banks are focusing on optimizing their distribution networks and tailoring their branches to different segments or types of locations. On one end of the spectrum, some have built more automated branches, such as mini-branches located in shopping malls (smaller in size than U.S. supermarket branches). Others are building locations with space dedicated to their affluent or small business customers. One bank in particular has several branches with lounges and conference rooms that their premier or small business customers can reserve for meetings. On the other end of the spectrum, one of the large banks is planning to build a “financial mall” location where different lines of business (e.g., retail banking, brokerage, mortgage loans, car loans, etc.) will have their own storefronts in the same building, similar in concept to how retailers owned by the same company have stores in the same mall.

The banks we visited here also seem to have a greater focus on customer segmentation than we’ve seen elsewhere. In particular, several have increased their focus on women due to the wealth that has been inherited by many customers in this segment. One bank has a package (with the tag line “A style of banking that celebrates your femininity”) for ladies with a free coupon book providing discounts at local retailers as well as lectures, events and educational seminars specifically designed for women. This same institution also has a package called “New to the UAE” targeted at foreign nationals arriving in Dubai. This package includes various products including checking accounts, personal loans and insurance. With all of the immigrants coming into the U.S., it seems obvious to us that there should be a need for a similar package back stateside.

With respect to sales and marketing, two things in Dubai really stood out. First, our United Arab Emirates colleagues told us that the society here is very promotion-oriented and that sweepstakes contests are commonplace. At least two of the large banks have ongoing sweepstakes offering the chance to win up to 5 million dirhams (about $1.4 million) for customers opening savings accounts with as little as 1000 dirhams (approximately $275). Customers can get additional entries by depositing larger amounts into their new accounts. These sweepstakes, which are offered either monthly or quarterly depending on the bank, apparently have been very effective in attracting new deposits. Banks here in Dubai should consider themselves fortunate that the regulators allow these types of contests since they are not allowed back home in the US.

The other interesting characteristic of retail banking in Dubai is the importance of outside sales forces. One of the bank executives we met indicated that only ten percent of new accounts are generated from walk-in branch traffic. The remaining 90 percent comes from the efforts of outside sales reps that either focus on specific product categories such as credit cards and car loans, or target HR managers at local companies to obtain the banking business of employees (similar to ‘Bank-at-Work’ programs offered by some U.S. banks).

— Chris Gill