Dubai: As UAE’s digital banking initiatives rise across the nation, the number of tangible bank branches has been reduced by half, with no current need to open new ones. Despite the significant growth in banking transactions, the number of people physically visiting banks has steadily decreased, signaling a rise in digital literacy among the population.
Most customers now visit branches only for essential matters. The UAE Central Bank’s report reveals that over the past five years, the number of branches has seen a sharp decline. According to a study by the UAE Banks Federation, 70% of the population now uses mobile apps for banking transactions.
Bank modernization is increasingly focused on digital transactions, while tangible branch upgrades are minimal, the report highlights. Traditional banking methods have nearly become a thing of the past. The convenience of anytime, anywhere service through online banking has made digital platforms increasingly popular.
As of May, there are 554 tangible bank branches in the country, down from 820 in 2019. Over the last five years, 266 branches have closed, a 33% reduction in total branches. Over the past decade, tangible branch numbers have decreased by 75%, according to Central Bank data. With banking services available at the click of a button, physical visits to branches are no longer necessary, leaving many traditional roles in banks obsolete.
Key positions like security officers, clerks, and attendants have disappeared from many banks. Clerks and cashiers top the list of traditional jobs expected to vanish within the next four years. Meanwhile, digitalization has led to a tenfold increase in customer trust in banks, according to the study.
AbdulAziz Abdullah Al-Ghurair, Chairman of the UAE Banks Federation (UBF), noted that consumer trust in the UAE banking sector rose from 84% in 2022 to 90% in 2023. He emphasized that the UAE’s trust index is higher than the global average and ranks above major international financial centers.
Jamal Saleh, Director General of the UAE Banks Federation, added that banks are set to invest $4.5 billion in new digital technologies. By the time the 2024 assessment is released, consumer trust in the UAE banking sector is expected to reach 95%.
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