An age of express loans all thanks to technology

UAE lenders are using the latest technology and offering ever faster loan approval and processing times to lure in new customers.

Mashreq’s Max Bundle package comes with a Samsung Galaxy Tab 3 tablet loaded with about 10 apps. Satish Kumar / The National

Type the words “UAE loans” into Google and the search engine will return more than 4 million results in less than half a second.

In this age of instant gratification, it is no surprise, then, that lenders are striving to offer customers ever- faster loan approval and processing times, as well as introducing new technology to make banking easier and more convenient.

Mashreq’s Max Bundle package comes with a Samsung Galaxy Tab 3 tablet loaded with about 10 apps.

“If you want to make a branch appointment we have an application in which the customer can set up a branch appointment. If you want to do a loan, a calculator is there. [There is also an app for] Dubai parking,” said Tooran Asif, the head of personal banking at Mashreq.

And HSBC has introduced a tablet platform that allows the bank’s relationship managers to “take the bank anywhere and at any time”.

“Our clients are increasingly looking for banking solutions that are responsive to their busy schedules and they are less interested in going through traditional branch channels,” said Raman Muralidharan, the regional head of customer value management, retail banking and wealth management, Mena, for HSBC Bank Middle East.

“As a result, we have introduced the HSBC tablet platform because it allows these discerning clients to continue fulfilling their investment strategies and wealth plans in an efficient and safe manner at a time and place of their choice without disrupting their lives.”

Emirates NBD is also using tablets to help relationship managers connect with their clients, in addition to introducing various new technology, including DirectRemit – which enables customers to send money to India instantly online and via mobiles with no charges – and an interactive cashier machine in Dubai Mall.

“I think banks are being driven towards having to introduce a lot more technology,” said Alistair Newton, an analyst at Gartner.

“The primary driver from banks is a fragmentation in demand. Ten years back if there were 100 people in the room there were basically three different ways of servicing them and the banks set the rules.”

However, people’s needs have become so varied now that it is impossible to meet them all using traditional technology, added Mr Newton.

Most banks will give the same answer when asked why they introduce new technology: “to simplify the lives of customers”, said Suvo Sarkar, the general manager for retail banking and wealth management, Emirates NBD.

Abu Dhabi Commercial Bank (ADCB) even named a product after this new trend in banking. Its SimplyLife brand strives to make personal finance available to everyone in a “simple, fast and friendly” manner by reducing the amount of paperwork prospective lenders have to fill out. It also offers an SMS service whereby customers receive a priority response to lending for urgent expenses like medical care.

And fast seems to be the name of the game now in finance.

HSBC pledges to approve online loan applications in 30 minutes, while Mashreq aims to go a step further.

“If a complete application comes [in any time before] 4pm, by the day end the money has been disbursed in the account,” said Mr Asif.

“When you need the money, you are not really applying because you are doing it from a lifestyle perspective. You actually need it to fulfil some need, so you need the money fast. You don’t apply and then wait two months to decide what you are going to do with the money.”

Even those missing a document are paid within 48 hours, Mr Asif added.

The catch is that these fast processing times do not necessarily apply to all.

In the UAE, with the Al Etihad Credit Bureau still not fully operational, determining the risk of an individual borrower can still be troublesome. So one of the most crucial factors becomes the creditworthiness of the company you work for. Those who work for companies which have been preapproved are guaranteed to get a loan if they are judged to have a good history. The situation is a lot more complicated for everyone else.

Neil Wetherall, 41, works for a company based in a free zone in Dubai which was barred by one bank because a previous employee left the UAE owing Dh250. Until recently the company did not appear on any approved lender lists, not even the bank it banks with, but it has since been added by one institution after an employee applied for a loan and the company was judged to be credit worthy.

Mr Wetherall now faces a difficult choice – to take out a loan with that bank to pay for his housing and children’s nursery fees, or to shop around for a better deal. However, the process of adding a company to a preapproved lender list takes days.

“It’s a big concern,” he says. “In two months’ time I need to have the money, so what I am going to look at is where I am at the end of this month and then see how much I need to take out because it is not only the housing loan.”

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