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An employee is seen inside one of Dubai Islamic Bank's women-only branches in Deira, October 26, 2010. Financial institutions in the conservative Gulf Arab region, where many women are reluctant to mix with men outside their families, are tapping into the niche, with women-only bank branches and investment funds mushrooming. Picture taken October 26, 2010. To match Feature ISLAMICFINANCE-WOMEN/ REUTERS/Jumana El Heloueh (UNITED ARAB EMIRATES - Tags: BUSINESS SOCIETY) *** Local Caption *** DUB01_ISLAMICFINANC_1027_11.JPG
An employee is seen inside one of Dubai Islamic Bank's women-only branches in Deira, October 26, 2010. Financial institutions in the conservative Gulf Arab region, where many women are reluctant to mix with men outside their families, are tapping into the niche, with women-only bank branches and investment funds mushrooming. Picture taken October 26, 2010. To match Feature ISLAMICFINANCE-WOMEN/ REUTERS/Jumana El Heloueh (UNITED ARAB EMIRATES - Tags: BUSINESS SOCIETY) *** Local Caption *** DUB01_ISLAMICFINANC_1027_11.JPG
Dubai, 13th June 2011. Maryam Al Shorafa, the Head of Ladies Banking-Ajman Bank during the launching of Mahra Ladies banking, at The Monarch Hotel. (Jeffrey E Biteng / The National)
Dubai, 13th June 2011. Maryam Al Shorafa, the Head of Ladies Banking-Ajman Bank during the launching of Mahra Ladies banking, at The Monarch Hotel. (Jeffrey E Biteng / The National)

Banks beginning to tap into potential of lady power

Did you know if you use the ladies-only section of an Islamic bank, you receive better rates and extra services?

When Fatima Altimimi heard a radio advertisement for a new women's banking initiative, she signed up for an account that day.

The administration worker from Kuwait was attracted by the lifestyle benefits the Mahra ladies service - launched last month by Ajman Bank - offered, including unlimited access to ladies clubs in the UAE and free valet parking at shopping malls.

"I can visit Sharjah Ladies Club anytime I want now," says Mrs Altimimi, 27, who has lived in the emirate with her banker husband for the past five years. "Usually, it costs around Dh100 for a day, so paying the Dh75 for the card is much better for me."

Mrs Altimimi, who says she prefers ladies banking because of the privacy the service tends to offer, adds: "I also like the valet parking that comes with Mahra. I go shopping twice a month and need free valet parking. I have already used it at Festival City and Mirdif City Mall."

With increasing numbers of women not only entering the workforce but also achieving senior executive positions, there has never been a better time for women financially.

Women in the GCC now control US$450 billion (Dh1.6 trillion) of wealth and with more money, they are more inclined to take control of their own financial destiny. Which is perhaps why UAE banks are increasingly tailoring their products and services to include women's banking options.

Rather than the traditional concept of ladies banking with separate queues or even sections to respect women's privacy, institutions are now offering special credit-card rates, car finance and discounts on lifestyle options.

Ajman Bank - the latest player to enter the market with Mahra, which is Arabic for filly - is a relatively new bank that launched two years ago and now has eight branches in the UAE.

With benefits such as unlimited access to ladies clubs in Sharjah, Abu Dhabi and Dubai - an offer that could potentially save customers such as Mrs Altimimi Dh4,000 on annual membership fees - and a Mahra-branded debit card offering discounts at shops, restaurants and hotels, the package is specifically targeting the female sector's professional and lifestyle requirements.

"Women like to be treated differently," says Maryam Al Shorafa, the head of ladies banking at Ajman Bank, who was appointed to the position in January to develop the new brand. "With the increasing number of businesswomen in the field, we see a lot of women involved in the small- and medium-business sector. Not only that, they are also starting up home-grown businesses and we would like to try to tap those home-grown talents and empower women to take advantage of our tailor-made proposition to suit their needs."

Ajman Bank is by no means the first financial institution to launch a service for women and, judging by the flurry of action in this segment over the past couple of years, is unlikely to be the last.

The trend kicked off 10 years ago with the likes of ABN Amro and First Gulf Bank, when they began offering female-only products and services such as special sections, tailored credit cards and home loans.

Then, in 2003, Dubai Islamic Bank introduced Johara - a women's banking service offering shopping discounts and health and educational benefits with its financial products. Emirates Islamic Bank (EIB) launched Al Reem in 2007 and National Bank of Abu Dhabi (NBAD) started Al Nada in early 2010. Abu Dhabi Islamic Bank is also fine-tuning its soon-to-be launched Dana ladies banking initiative.

As female customers take advantage of better rates on credit cards - NBAD's Al Nada credit card has an annual rate of just 18 per cent, almost half that of some other banks - and discounts on lifestyle activities, the women's banking industry is growing fast.

Sven-Olaf Vathje, a partner and managing director at Boston Consulting Group (BCG) Middle East, says this is not a new target market, but one that UAE banks have, in fact, been slow to recognise.

"Women are an often underestimated wealth segment in the Middle East and financial institutions are only slowly identifying women as an investor segment in its own right," says Dr Vathje, adding that UAE women control roughly $80bn of financial wealth. "This is surprising given the fact there are a number of financial institutions in the GCC that have, for a long time, already served women in dedicated branches, such as Islamic banks. But in many cases, women were served as 'men in skirts' - their often different investment needs were neglected.

"In a recent BCG survey of ultra-high-net-worth women, many women voiced dissatisfaction about how private bankers served them. Complaints ranged from insufficiently qualified relationship managers to unattractive product offerings. There is a clear opportunity for banks to differentiate in the women's segment. Sustainable competitive advantage can be gained by recognising and researching female clients' different financial needs and responding with a tailored product and service model."

The noticeable growth in women's wealth, which, according to BCG's latest Global Wealth Report, is set to grow more than the 8 per cent already predicted for overall GCC wealth over the next few years, has spurred financial institutions into focusing their efforts on the women's segment. But is this sudden interest in women solely due to banks waking up to female financial clout?

"There are different reasons; mainly the fact that UAE culture values women and gives them a special attention in recognition to the role they play in our lives, especially that nowadays women have diversified roles as they are not only raising our children, but they also became successful executives," says Faisal Aqil, the deputy chief executive of EIB.

"Also, it's more of a convenient banking environment for many ladies in the UAE as they feel more appreciated and more engaged. Financially speaking, studies show women control 58 per cent of the weekly or monthly expenditures. Therefore, it is a segment that should be catered to individually with a separate tailor-made product offering."

Other banks are more forthright, admitting their investment into this segment is not only to do with catering to their customers' requirements, but also their own.

"When the financial crisis hit, there were big issues in terms of customers feeling apprehensive about their banks," says Vineet Madan, the liabilities products manager at NBAD.

"People were not sure who to bank with and security became a big factor, and we felt we were in the right position to approach customers and give them that feeling of safety.

"Banks offer a lot of similar products, making it difficult for customers to differentiate between them, which is why if we target a specific sub-segment and design special packages for them, it has better appeal. We have packages for students and doctors, as well as women as these are segments that have special banking needs."

As well as finding new segments of the market to target following the global economic fallout, banks also needed to take into account the cost of regulation following a raft of new rules introduced by the Central Bank this year, which has capped loan fees and limited personal lending.

"It has always been a strategic intent to address the right and valuable segments to compete in and we find that ladies banking is mutually beneficial for the ladies and for us," says Asad Batla, the group head of retail banking at Ajman Bank, who admits that lenders now need to seek customers who are not leveraged and over burdened with debt.

"What the Central Bank regulations are doing is making the overall industry more responsible by capping the dead bird. If you keep nailing the already borrowed segments, you would not find enough customers, so the regulations are opening up new segments that are looking for financial solutions. If all banks and all companies go after the same segment, the share is limited. You have to go after new segments."

BCG's Dr Vathje says the decision by banks in the UAE to target a new client base is a natural and logical step as the region's retail banking sector catches up with the more sophisticated products offered in developed nations.

"It is a natural consequence of the evolution of regional banking markets that banks are now fine-tuning their segmentation approaches. We have seen the same development in other maturing industries - this is why there are, for example, expatriate calling plans in telecoms or student travel programmes in airlines.

"For many Middle Eastern banks, the search for attractive client segments in domestic markets has been fuelled by losses they have made abroad. International expansion strategies have not delivered the expected results. A better coverage of the domestic client base through fine-tuned segment strategies seems more promising."

But Deanna Othman, the general manager of priority banking and head of diversity and inclusion for Standard Chartered UAE, says the financial crisis has very little to do with why women are becoming a prominent financial force.

"It's an emergence over the last 10 years of proper education and it's also the emergence of those women who went abroad to study coming back into the region and contributing to the economy," says Ms Othman. "Women are networking and talking more and are being socially accepted in the business community. These things are helping to bring out women's financial voice."

How the UAE's banks have responded to that voice is interesting.

While EIB offers ladies-only sections across its network, other lenders offering women's banking schemes do not think it is necessary to roll out specific sections throughout their branches and instead focus more on the benefits their different packages can offer.

So is this growing trend likely to expand to all banks, local and international?

"It will mostly be the local banks who focus on this segment and not so much the foreign segments," says NBAD's Mr Madan. "If you look at it by nationality, it's really the UAE national women, rather than expatriates, who need to be treated specially and in a preferential manner and, of course, there is a natural affinity between them and the local banks. Foreign banks may offer it as one more product in their overall suite, but I don't think they will focus as much on this."

This is definitely the case for Standard Chartered, which has not opted for a specific ladies banking initiative. Ms Othman believes there is more to attracting female customers than simply offering a "pink" debit or credit card or female-only branches.

"When I talk to female entrepreneurs, they're not telling me they need something specifically for them, but they would like to be able to have access to that information so that they can make educated decisions," she says.

"We have a very robust customer survey that we run every quarter in order to feel out our customer and so far, that has not come out as a strong need. There is a need for separation in certain areas of the region, but in the financial community people are becoming more comfortable in a co-mingled environment."

Instead, Standard Chartered is focusing on offering its women customers more female wealth managers and monthly educational seminars that focus on investment and help them to understand the opportunities available in the market.

"When a female invests into the market, the average return is higher than a man," adds Ms Othman. "Women make more profit than men because they adopt a more conservative approach and hold onto their investments longer, whereas men buy and sell more frequently. So we are getting into that space where we hold educational seminars on wealth management for our customers who have a liquidity of around Dh100,000 or more.

"When you bring a group of women together, that exchange of ideas creates a lot of awareness and networking. So if you talk to one lady, she will go and talk to 10 more. That's quite powerful and if you look at it from a business standpoint, there is a lot of money there to be invested that is held with women and is conservatively held by women in traditional forms like a regular, pure vanilla savings account. But if it stays saved there, then they are missing out on the opportunity to increase their wealth."

But ask the banks pushing the women's banking proposition and the message is clear: women want more than educational advice. They want specific products as well. So are women more demanding?

"Imagine if I said we had launched a women's section of banking and that's all we will offer. Would any female Emirati or expat be happy about that?" says Ajman Bank's Mr Batla. "They would say thank you very much, but for it to be good enough for them we have put together a value proposition that offers all the lifestyle benefits they already use but at a better level.

"I wouldn't say it's just because women are more demanding, just that they are more discerning."

 

The Major Players

Ajman Bank Mahra

Fees Dh75 a month

Benefits A debit card, styled in the Mahra logo of a horse, unlimited access to ladies clubs in Abu Dhabi, Sharjah and Dubai, discounts to restaurants, hotels and resorts as well as concierge services and valet parking at selected venues

Access There is a Mahra section at the bank's Ajman branch, with plans to introduce it at the Abu Dhabi branch shortly

 

National Bank of Abu Dhabi Al Nada

Fees Dh15 a month

Benefits Lower interest rates on loans and credit cards (18 per cent compared with the bank's average 23.88 per cent), lower charges for safe deposit boxes, a free MasterCard debit card and access to a loyalty programme that offers discounts at outlets such as Dubai's Atlantis The Palm

Access There is one women's-only branch in Al Ain and a special Al Nada section in an Abu Dhabi branch

 

Emirates Islamic Bank Al Reem Ladies Banking Service

Fees There are no fees. All women automatically receive the service

Benefits A special branded debit card and chequebook, discounts on the bank's products and services, travel discounts of up to 10 per cent, free roadside assistance, a 20 per cent discount on safe deposit lockers and invitations to ladies-only events

Access All EIB branches have separate ladies areas

 

Dubai Islamic Bank Johara

Fees There are no fees

Benefits Shopping discounts, free debit and credit cards, free chequebook, a women's-only auto finance option and access to discounted loan and home financing

Access The first dedicated Johara branch was established in Jumeirah, Dubai, in 2003. Separate ladies' sections are now available in 10 branches across the UAE

arayer@thenational.ae

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