Across the GCC, retail banking has reached a point of maturity where most adults already hold at least one bank account. In the UAE, near-universal financial inclusion is now a reality, with 94% of residents banked. More tellingly, many customers hold multiple banking relationships. Research has shown an average of 1.75 bank accounts per adult in the UAE, a figure that has likely risen further with the arrival of digital banks and app-first offerings.
For banks, this means the market is already well penetrated and, in theory, well targeted. Yet despite this, acquisition remains the dominant growth strategy for many institutions. New credit cards, salary transfer bonuses, zero-balance accounts and limited-time interest rates continue to dominate marketing spend.
While these tactics undoubtedly deliver short-term wins, they come at a growing cost. Customer acquisition costs in banking have risen sharply, with retail banks now spending an average of over US $560 to acquire a single customer, and commercial accounts costing significantly more.
The bigger issue is what happens next. Acquisition is only valuable if it leads to sustained engagement. In reality, a sizeable proportion of newly acquired customers quickly go quiet. Industry data shows that more than a third of new accounts become inactive within a year. A customer signs up to take advantage of an attractive offer, uses the account briefly, and then defaults back to their primary bank. The acquisition cost is incurred, but the relationship never matures. What looks like growth on paper quietly becomes a sunk cost.
This is where a more strategic conversation needs to begin. For many Middle East banks, the largest untapped opportunity is not the next new customer, but the customers they already have. Specifically, the latent customer base that has signed up, onboarded successfully, but is not meaningfully engaging.
The Barrier to Re-engagement
Reactivating dormant users is not a new idea, but it is one that has often been poorly executed. The challenge lies less in intent and more in approach. Following traditional segmentation models, marketing teams spend weeks building audiences based on who customers are assumed to be, rather than how they actually behave.
At the same time, manual audience creation introduces delay. By the time segments are defined, campaigns approved and messages launched, the window of relevance may already have closed. A dormant customer who was receptive to re-engagement last month may have since shifted their activity to a competitor offering a more timely or personalised experience.
In fast-moving, app-driven markets like the GCC, speed matters as much as insight.
Why Behaviour Matters More than Demographics
If banks are serious about reactivating dormant users, they need to start with behaviour. What customers have done – or stopped doing – is a far stronger predictor of future engagement than demographic assumptions. Transaction frequency, product usage, session recency and feature adoption, as well as deeper indicators such as deposit behaviour and share of wallet, tell a far clearer story about intent and opportunity.
In banking, however, dormancy is not always defined by inactivity alone. Many customers continue to log in and engage at a surface level, yet still treat the account as secondary, with limited high-value activity such as salary deposits, transactions or product usage.
A customer with consistently high balances who has not logged into their banking app for 30 days presents a very different opportunity to a low-balance account that was rarely used in the first place. On paper, however, both customers could look identical: young professionals, similar educational backgrounds, even similar incomes and life stages.
Equally, frequent app usage alone does not always indicate meaningful engagement, making it critical to distinguish between passive activity and value-driving behaviour. Demographics alone do little to reveal who is most likely to re-engage.
On the other hand, behaviour-based segmentation allows banks to move away from broad, generic outreach and towards timely, relevant engagement that feels helpful rather than intrusive.
Crucially, behavioural audiences can update in real time. As engagement patterns change, segments refresh automatically, ensuring marketing spend is not wasted on customers who have already moved on. When enriched with first-party data such as transaction history, product ownership and CRM attributes, banks can create deeply contextual re-engagement strategies without compromising privacy or regulatory compliance.
Turning Insight into Action
Once behaviour becomes the foundation, re-engagement use cases begin to surface naturally. High-value customer reactivation should be the first priority.
These are customers with strong historical engagement who have gone quiet or reduced meaningful activity over a 30-to-90-day period. Rather than generic reminders, banks can use past behaviour to shape relevant comeback offers, whether that is preferential savings rates, fee waivers or tailored wealth products.
Loyalty is another area where value often lies dormant. Many customers accumulate rewards or points and then disengage, not because they are dissatisfied, but because the value is not made visible. By identifying customers who have earned rewards but stopped interacting with loyalty features, banks can reintroduce urgency through expiring benefits, tier-based incentives or exclusive access that nudges them back into active use.
Re-engagement is also a powerful driver of cross-sell when done thoughtfully. Customers who actively use one product, but have never explored complementary services, represent low-friction growth opportunities. Usage patterns can reveal when a current account holder is a strong candidate for a savings product, loan or investment service, allowing banks to simplify onboarding and remove barriers at precisely the right time.
From Latent to Lucrative
For banks looking to shift from acquisition-led growth to sustainable value creation, the priority should be clear: start with high-value dormant customers and measure success through tangible business outcomes such as funded accounts, applications and product adoption.
In markets as mature as the GCC, the next phase of growth will not come from adding more customers, but from activating the significant value already sitting dormant within existing ones.
This Article Represents the Views of Lesia Kupriienko, Industry Lead – Finance, AppsFlyer.
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