The Role of Electronic Banking in Shaping the Strategic Direction of Banks in the United Arab Emirates

Abstract

The advent of digital innovation provides profound benefits and an excellent opportunity for various industries, including banking business.  A plethora of electronic banking services have been witnessed in developing countries worldwide.  The United Arab Emirates (UAE) is one of the most economically competitive in the region and the wider world.  The adoption of electronic banking in UAE has been established a long time and increased tremendously.  Scholars and business experts revealed that although the banking sector in UAE is noted as a financial and service sector leader, the whole system of financial services and intermediation is yet to be properly utilized as a real added value tool.  The main focus of this paper is to investigate how electronic banking is shaping the strategic direction of banks in UAE, based on qualitative interviews with the bank managers and secondary data.  Moreover, what are the provisions made to improve customer-company relationship using this technology?  The results suggest that banks have thorough and defined procedures to acknowledge internet services, and although customers are still hesitant in using newer banking services, the need for sophisticated electronic banking system has acquired a new urgency.  It was suggested that the specific factors such as convenience, security transactions, and computer self-efficacy could have a significant impact to maximize their profitability and improve customer-company relationship.  Also, study revealed that trust is central to an effective functioning electronic banking system.  Although electronic banking transactions have improved over a decades in UAE, more effort is required to alleviate influences associated with lack of trust of online transactions among electronic banking users.

Keywords: electronic banking, United Arab Emirates