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Abu Dhabi, UAEWednesday 20 June 2018

Don't write off paper bank statements in the UAE just yet

While the majority of bank customers opt for electronic statements over their paper alternative, they still have their uses

Illustration by Alex Belman for The National
Illustration by Alex Belman for The National

Electronic bank statements have their virtues - from saving trees to keeping your desk uncluttered - but they can also be easy to forget.

While UAE customers can still have their statements delivered by post, they will now find themselves in the minority.

Banks in the Emirates say the majority of their customers opt for electronic or e-statements over their paper equivalent.

Emirates NBD and Citi, for example, both say more than 90 per cent of their customers now choose e-statements.

"A small minority continue to opt for both paper and e-statements, however this number is steadily decreasing," says Suvo Sarkar, senior executive vice president, head of retail banking and wealth management at Emirates NBD.

But while paper statements are becoming less popular as technology advances, they are yet to disappear entirely.

Geoff Stecyk, chief operating officer at RAKBank, says some customers still require paper statements for certain situations. "This is often the case with our business banking and corporate customers, which have a definite filing and record-keeping system set in place."

He adds that while electronic statements offer convenience and are eco-friendly, "they are not for everyone".

"Consumers must be able to receive that information in the manner that works for them," he says.

Other advocates for the paper statement say the monthly records help customers spot fraudulent purchases and errors and, in the case of bills, remind you of payment deadlines.

So, what can you expect from bank statements in the future and how do you decide whether sticking with paper makes sense for you?

A more digital future

Bank statements played a key role when balancing a chequebook was common. You would keep track of deposits and withdrawals on paper and compare your numbers each month with your statement. One perk to using paper is being able to make notes on it.

But, just as cheques slowly gave way to debit cards, paper bank statements are being replaced by electronic alternatives and other technology.

Instead of a formal document at the end of the month, for many, digital banking acts as a rolling, continuous spending tracker.

"Customers receive an SMS when they conduct any payment or transaction confirming its execution and reminding them of their balance. Every month they receive an emailed statement reviewing their recent transactions," says Philip King, global head of retail banking at ADIB.

At Emirates NBD, customers can access statements via online and mobile banking platforms around the clock. They can also obtain a mini-statement of their account via ATMs and receive SMS alerts for key transactions such as credit or debit card spending, remittances and fund receipts, keeping them permanently up to date on their financial activity.

Mr Sarkar says on Liv., its digital bank for millennials, customers can also add their own references to account statements on the app "such as a bill number, or tag a spend to an occasion like a birthday or anniversary, enabling easy recall later".

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Digital campaigns

Many UAE banks have also actively campaigned to educate customers on the value of e-statements, including the benefit to the environment. Mr Stecyk says RAKBank's "many campaigns" reduced the number of customers still requiring paper statements to only 11 per cent of its customer base.

"We consider the use of electronic statements a more reliable way of ensuring that customers actually see the information and retain important records," he says.

Tara Sirinyan a spokeperson at Citi, says its aim is to become the world's leading digital bank.

"Less than 3 per cent of transactions in the UAE now happen in our branches," she adds

Mr Sarkar also refers to the bank's "ongoing awareness campaigns" to drive down the use of paper statements.

But there's also an increasing digital adoption in the Emirates, fuelled by the country's high smartphone penetration rate - currently at 81 per cent, according to Newzoo’s Global Market Report.

"The role of paper statements is diminishing as the convenience of an e-statement that is easily accessible from anywhere and anytime with a click far outweighs the efforts to file and keep track of physical statements. Additionally, increasing digital access and adoption provides customers with real-time information on their financial activity instead of having to wait for a monthly statement," says Mr Sarkar.

While many banks encourage new customers to opt for digital statements the moment they join the bank, others stress that customers can decide what's best for them.

ADIB says it asks any new customers whether they want to receive paper statements or an e-statement. "We feel that offering this choice is important," says Mr King.

Around half of account holders at the bank receive printed statements, says Mr King, a figure that drops to one in five for covered card customers.

However, Mr King says rapid adoption of its digital banking channels, with almost 2 million mobile transactions conducted via the bank's mobile app, signals the end is in sight for the paper statement.

"We expect that printed statements are likely to become obsolete at some point in the future," he says.

Rob Krugman, chief digital officer at Broadridge, a customer communication and analytics firm in the US, says it's "not going to snap our fingers and stop sending paper” to people who want it.

The company delivers financial statements on behalf of thousands of brands. "But there's an opportunity to make the paper and the digital work together," he argues.

For example, he says, a one-page statement could have an integrated chip in the paper, which you could scan with a smartphone to see more details online.

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Paperless not for everyone

Banks in the US have encouraged customers to opt for electronic statements, or "go paperless", for more than a decade, and the push continues; a quarter of banks now charge a fee to send a paper statement, according to 2014 data from banking analytics firm Novantas.

About 61 per cent of checking account customers only receive electronic statements, according to a 2017 survey by Javelin Strategy and Research.

But some people do not benefit from e-statements. Unlike the UAE's heavy digital focus, about a third of US households don't have access to broadband, or high-speed internet at home, according to a 2015 study by the Pew Research Center.

Also, by law, US banks have to make paper statements available as an option. They can't assume everyone has internet access.

Here in the UAE, many of the banks still offer paper statements free of charge, but others are starting to apply a fee.

Citi charges its standard account holders Dh25 for any additional statement requests, and Emirates NBD and ADIB apply a similar charge for ad-hoc statement requests at their branches for customers that have opted out of paper statements.

This is where customers can get caught out. When applying for a personal loan, credit card or mortgage from another bank, they will be asked for paper statements from their main bank. And other situations, such as court cases or tax audits, may also require bank statements.

"The requirement for paper statements is becoming restricted for selected uses such as a travel visa application at some consulates or for other similar entities who still require physical statements for processing requests," says Mr Sarkar.

Plus, having a smartphone might not be enough for everyone to keep track of their finances.

It's "very different seeing a bank statement on a full sheet of paper [rather] than a small screen," says Chi Chi Wu, staff attorney at the National Consumer Law Centre in the US. Certain transactions and bill deadlines on credit card statements might get overlooked and lead to missed payments.

Storing paper in a safe place is intuitive, but it is wise to save e-statements offline too, either printed out or saved on your computer. Some banks keep them available online for several years.

Mr Stecyk says in emergencies such as data corruption incidents for instance, e-statements can be easily recovered by logging on to digital banking statements.

But some people are old-fashioned and simply like to read the paper form of their statement.

Whatever the future may hold for statements - paper or digital - they are still an important financial record that should be monitored closely to ensure no fraudulent transactions have taken place.

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Read more:

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Why some people prefer paper

Even bank customers who can easily receive statements online may prefer paper for various reasons:

• To cut through information overload online

Emails about statements can get overlooked in a crowded inbox, and checking e-statements usually requires logging on to online or mobile banking and downloading a PDF.

"Clients who have paper statements check them at least once," says Dana Twight, a certified financial planner and owner of Twight Financial in the US. "It comes in the mail and they see it.” In contrast, Ms Twight says, her clients with e-statements don't read them, except maybe around tax time.

• To keep a more permanent record

Computers crash and files get lost, so storing statements digitally isn't foolproof. Although paper takes up space, having a copy at hand can be more reassuring than one in cyberspace.

• To make it easy for family to find, if necessary

If an older person can no longer manage their finances, relatives might need to step in. Finding paper statements might be easier than tracking down bank website passwords.