One in Four UAE Residents Consider Credit Card Providers Least Trusted | Zoom Fintech


Nearly one in four UAE residents consider bank card issuers the least reliable among money service providers, according to a brand new study that looked at the company’s popularity with buyers.

Twenty-three percent of UAE residents consider bank card providers to have the lowest popularity in the money service provider industry, according to the Panorama of the financing of the Center-East report by market intelligence consulting firm Perception Discovery, with recruiting firms in second place, telemarketers and name centers in third, and real estate brokers in fourth place.

Graphic by The Nationwide

“Bank card providers have a negative reputation in the Central East, which is not too shocking when their monthly interest rates are sometimes 3% and the annual share price (APR) with some companies exceeds 40%, ”Nigel Sillitoe, said the chief government of Perception Discovery.

There have been 6.5 million credit scoring services resembling loans, bank cards, mortgages and overdrafts in the UAE, according to November 2018 information from Al Etihad’s credit rating bureau, with around three million energy debtors.

To regain their trust, bank card issuers should revisit their value proposition by exploring methods to show that they are there to help people manage their funds in these powerful cases.

Nigel Sillitoe, Discovery of Perception

Bank cards are generally a healthy method of borrowing money on a short term basis if the cardholder clears the stability each month. Nonetheless, they will become a problem if a buyer pays only the minimum each month or runs out of funds, which can lead to escalating stability with excessive interest charges and late fees.

The Central Bank of the United Arab Emirates last month unveiled a 100 billion dirhams stimulus package, which it then increased to 256 billion dirhams, to encourage lenders to reduce the debt of debtors affected by Covid-19 both in the event of illness, reduction in salary or loss of employment.

The report found that buyers with lower incomes, with incomes between $ 1,350 (Dh4,958) and $ 2,800 per month, gave the worst scores to credit card issuers, while those incomes above $ 11,000 were “Fairly well disposed” for the issuers of bank cards.

Mr Sillitoe said card issuers should focus less on perks, like cash programs, free golf periods and airline miles, and instead “revealing the true cost of proudly owning a credit card by being more frank on the APR “.

The popularity of independent financial advisors has also deteriorated over the past 12 months, with 9% of the 1,000 buyers surveyed in the study in February 2020 having a poor view of the career, up from 5% last year, adopted by advisors. banking. at eight percent.

The report pointed out that while impartial financial advisers “are seen as having poor popularity,” they still performed better than other professions in the industry.

Impartial monetary advisers are likely to have a better picture of these incomes between Dh10,001 and Dh25,000 from month to month, according to research, while advisers of financial institutions are better regarded by these incomes at over 25,000 Dh from one month to the next. .

“Compared to different professionals, monetary advisers face a wave of recent regulations, as well as many initiatives from authorities in GCC countries, which have sought to improve the conduct of advisers,” Sillitoe said. . “Advisors have risen to the challenges, and the business will likely be stronger because of it.”

Earlier this month, the UAE Insurance Coverage Authority postponed the rollout of its new life insurance coverage rules until October 16, which are expected to provide prospects with greater transparency and enforce caps of costs on the sale of security products.

The UAE Insurance Coverage Authority first proposed an overhaul of the life insurance coverage industry in 2016 to improve the way insurance policies for financial savings, financing and life insurance coverage are purchased. At the time, the regulator said it received “an alarming number of complaints” from locals who mis-sold long-term savings products, provided by insurers and distributed by financial advisers.

The mis-selling of some advisers has shattered the popularity of the business, with many monetary advisory firms cutting prices in the first place in 2019 by using fewer or cheaper advisers, based on research.

“Although the region’s economies have grown, expatriate advisers have faced a downturn in their business,” said Andrew Hutchings, chief analysis officer at Perception Discovery. “It was at a time when the remaining expatriate buyers were better informed, more demanding and had a clearer idea of ​​what to expect from advisors. In the meantime, the prices of many advisers had risen, in part due to increasing regulatory requirements. ”

By the start of this year, however, the scenario had changed with more than 60 percent of advisors having grown their business in the past 12 months. Only 17 percent of advisers experienced a contraction in the business, the study found.

While 58 percent of monetary advisory firms’ revenue comes from upfront fees or commissions, the remaining 42 percent comes from recurring fees or commissions. Still, some advisers believe the new rules could hurt income because they consist of caps on commissions.

Almost two-thirds of advisers believe their money flow is likely to decrease due to the brand new rules, with 13% looking to promote their business as soon as they take office. Still, 27 percent are optimistic that the new rules will benefit the company.

Tom Bicknell, an accomplice with legislative agency Pinsent Masons, said there would have been a “collective sigh of reduction across the entire UAE life insurance coverage market”, when the AI introduced the postponement of the implementation of the regulation from April 16 to October 16 due to the pandemic.

“Considering the implementation costs for market contributors and in addition to the monitoring costs resulting from its deployment, the postponement of this game-changing regulation makes sense to give the market time to work through the challenges posed. by Covid-19, ”he said. declared.

Updated: April 15, 2020 10:29 a.m.


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