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The future of personal finance distribution model in the Middle East as per

How the internet and the digital media is going to change the way banking distribution model operates in the Middle East

August 5, 2012 3:29 by

How do personal finance products get distributed in the Middle East today?


Model A: Banks employ staff mostly on the roles of an outsourced entity. The outsourced agency is reimbursed all the staff costs (salary/visa/travel) and a fixed compensation per staff employed. The agency works as a staffing company providing administrative/infrastructure support to the banks. The bank employs 1-2 Managers on its own rolls to drive the team achieve their targets. The team does tele-calling (officially banned by UAE Central Bank as per the circular in March 2011), or cold calling from office to office and generates business. The salesperson gets a small salary and an incentive plan on per conversion basis. This model is used by most banks but could prove to be expensive due to expenses of agency/staff. The biggest risk in this model which the banks tend to ignore is that they are in breach of UAE Central Bank regulation of tele-calling.


Model B: This is a complete outsource model where the bank appoints a DSA (Direct Sales Agent) to sell personal loans/credit cards and the DSA is paid a commission as a % of the loan value or the number of credit cards sold. The DSA appoints staff and runs the business independently. The selling methods involve tele-calling, cold calling, reference calling, and some techniques include force selling, mis-selling and plead-selling (Example: “Please take a credit card else I might lose my job”). Very few DSA’s are professionally run organizations where there is effort in terms of training the salesperson and administering KYC (Know your Customer) guidelines. This is an excellent proposition for banks commercially but could be a disaster as banks have absolutely no control over frauds/mis-sell/KYC requirements or compliance related issues. Banks tend to forget that ultimately they are responsible to the regulators whether a product is sold by them or through an intermediary.


Model C: This model is banks employing their own staff to sell personal loan/credit cards. This is an expensive model and scale cannot be reached unless there is a large workforce. The staffs can cross-sell products to existing clients and also sell personal finance products to employees of corporate customers. From a compliance perspective this is the safest model.


Model-F or the Future Model of Personal Finance distribution


This model is for a slightly mature market like the western world and has also taken shape in India. Here the customer becomes the king and decides the personal loan or the credit card he needs to buy. The customer visits a personal finance aggregator site like and chooses the products that he needs to apply for. After applying the site processes this information for lenders/intermediaries to start offering the best deals to the customer. The customer looks at his choices and then decides on the best deal.


Can this work in the Middle East?

We definitely think so. UAE could be a leader in this direction as the market has matured in this space. There are sites like, and which offers loan-seekers to compare products across banks and apply online. As these leads are generated by the loan-seekers directly, these are leads where a phone call is solicited by the loan-seeker. Banks/Intermediaries can be the biggest beneficiaries of this new wave as they could mitigate the risk of breaching the tele-calling regulation of the UAE Central Bank.


Do people actually apply for loans online?

This market is growing at an exponential pace. The loan application in the first half year of 2012 for exceeded over AED 3 Billion. The story is similar for other personal finance aggregators in the country. This number could be a small portion of the total personal finance market but the future looks bright for this channel of personal finance distribution.



MoneyGulf ( is an online financial and feature comparison provider for personal finance as well as commercial finance. The site allows a user to get information on interest rate and other charges/features of 20+ banks in the UAE. MoneyGulf also offers users to apply for loans from multiple banks online. MoneyGulf distributes such queries to its data subscribers from multiple banks. Banks/Bank intermediaries get in touch with the customer with their offers and the customer gets to choose the best offer in the market. is UAE’s leading personal and commercial finance comparison site.

For further information, please email: [email protected]

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