cashy survey paints bleak picture of financial services in Arab world
Three-quarters of consumers unhappy with financial services offering
Product providers should be responsible for teaching money management skills – but media is most responsible
80% would use a website that compared financial products in the region and gave tailored financial planning advice
ALMOST 77% (76.9%) of consumers in the Arab world are unhappy with the financial services available to them, a survey conducted to mark the launch of the region’s first dedicated personal finance website has shown.
The poll, undertaken by cashy.me, which has just gone live and has both English and Arabic channels, showed that people are looking for help with their money management, but feel let down.
Nearly 60% (59.9%) of respondents said they were not handling their finances as well as they could be, and almost a third (31.3%) confessed to worrying about their debts.
Almost half (47.7%) said they felt product providers, such as banks, had the most responsibility to teach consumers about their personal financial management. Only 12.3% thought the greatest responsibility lay with the media. However, when it came down to it, the media was found to be taking the most responsibility for educating consumers.
Almost 62% (61.6%) said the media was taking responsibility for helping consumers to better manage their finances. That was followed by the school system (59%), and family (45.3%), with banks trailing in last place. Only 43.9% felt banks acted in any way responsible for personal finance education.
Suresh Kumar, chief executive of Emirates NBD Capital, told cashy.me he was unsurprised by the findings. “Every time there is a global financial crisis this issue surfaces,” he said. “In a bull market or during periods of strong [economic] growth, the real problems are papered over.”
Consumers want help with their money management, according to the survey. A total 80.1% of those questioned said they would use a website that compared financial products and services available in the Middle East and Northern Africa region and offered financial planning advice tailored to the different groups of people living here, in a fun and interactive manner. And 68.4% said they would welcome free, independent and anonymous assistance with their financial planning.
Kumar welcomed the launch of cashy.me. “When this website is fully rolled out it should be really helpful and give people a better understanding,” he said.
Nima Abu-Wardeh, founder of cashy.me, believes there is a “great need for a resource that helps consumers in the Arab world navigate the financial minefield”.
“Our survey proves it,” she said. “People are crying out for help. cashy is a first: never before have consumers in this part of the world had the ability to compare financial products at the click of a mouse, or read unbiased, well-researched articles on all areas of personal finance in both English and Arabic.
“Ours is a significant project in terms of what we’re setting out to do. We have huge plans for cashy. Watch this space!”
Jonathan Brookes, regional director at Acuma Wealth Management, the Dubai-based independent financial advisory firm, said the research highlighted the “real issues” of the financial services sector in the region.
“There are too many companies, including banks, that hire unqualified, inexperienced staff simply to push products without any explanation and the survey clearly reflects this,” he told cashy.me.
“In general, product providers and banks are unable to provide the information needed for an individual to be able to make an informed decision, but there’s also a shortage of qualified financial advisers capable of giving the advice needed.”
Brookes urged consumers to seek advice from an independent, qualified adviser. Check the qualifications and experience of the adviser, as well as the status and reputation of the company he or she represents.
Halla Sakr, head of personal financial service for the MENA region for HSBC Middle East, said: “In these times, families need greater support and guidance to effectively handle their finances, not simply in schools and colleges, but through ‘trusted advisers’ providing professional financial guidance and planning.
“People have to understand that effective planning is the key to financial security and must be encouraged. Getting good financial planning advice from trained and trusted professionals will go a long way in helping people make intelligent money decisions and cope with their financial requirements in line with their risk appetites.”
She said there was a “definite role for financial institutions to continue, and to build on, their work to guide and advise individuals on the best ways to manage their financial requirements”.
The cashy.me website, which is powered by Zeedna – a social media publishing platform developed by Baraka Ventures to support the rapid expansion of online communities – allows consumers to compare credit cards, current accounts and savings products from financial services providers in the Arab world. Comparison tables on other product areas will be added over time.
The cashy community has the ability to ask a panel of experts questions about their personal finances, and users can try to help each other by adding their own answers. Plans are afoot to add other interactive features, too, such as the ability for users to share their haggling victories with one another or take part in the ‘Debate of the Day’.
Jennifer Hill, acting editor of cashy.me, said: “This is a truly ground-breaking initiative, and one that I’m very excited to be involved in.
“The Gulf is a part of the world where there has been very little transparency in financial services or scrutiny over how fair consumers are treated when it comes to all things financial.
“We aim to empower our cashy community – to get them a better deal and help them shape their financial future. With the global economy largely on its knees, there’s never been a better time to take control.”
The majority (74.2%) of the 160 people surveyed live in the UAE. Some 14.5% live in Saudi Arabia, 2.5% in both Bahrain and Kuwait, 1.3% in Qatar, 0.6% in Oman and 4.4% in other parts of the Arab world.
When asked their nationality, 36.3% said European, 34.4% “other”, 15.6% GCC national, 6.9% from the sub-continent and the same percentage said they were Asian.
Age-wise, most (67.7%) were aged 30 to 49, with 19% falling into the 18 to 29 age bracket and 13.3% were 50 to 69.
Pic credit: Simon Howden/ FreeDigitalPhotos.net
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