UAE banks update terms and conditions from January 2027: What to check in your notice, from fees to facial recognition

Abu Dhabi: Banks operating in the country have begun announcing new updates that include amendments to the terms and conditions of transactions and fee schedules, which will come into effect from the beginning of 2027. They have asked customers to review bank notices and amended versions of contracts, especially the clauses related to digital services, data use, and transaction fees. According to messages sent to customers, the anticipated changes are not uniform across the banking sector, nor do they necessarily mean a comprehensive increase in fees, as some are limited to updating the contractual and regulatory wording, while others are related to new tariff schedules, the details of which will be revealed later. A local bank announced the issuance of an updated version of the terms and conditions relating to retail banking products, which will come into effect in January 2027, replacing the current version. The bank also issued a parallel update to the terms and conditions of Islamic banking services for individuals, which will come into effect on the same date. New terms and conditions The new terms cover the entire relationship between the bank and the customer, including accounts, credit cards, loans, electronic banking services and rewards programs, along with provisions related to communication, execution of customer instructions, data updates, and account suspension or closure. The updated version included an expansion of the provisions relating to the collection, use, processing and disclosure of customer data inside and outside the UAE, as well as the customer’s obligations to update information on work, residence, nationality, tax residency, contact numbers and documents submitted to the bank. The conditions also addressed digital verification mechanisms for customer identity, the use of facial recognition for login, adding beneficiaries, transfers, data updates, and execution of financial and non-financial transactions, with the possibility of replacing some traditional verification methods, including one-time passwords, with digital authentication methods. The publication of the new terms was not accompanied by an announcement of a general increase in account or card fees, which confirms the need to separate the updating of contractual terms from the amendment of the fee schedule. The customer should review the tariff schedule and product statement to ensure there are any actual financial changes. In a related context, a branch of a foreign bank operating in the country announced its intention to issue a new tariff schedule for its corporate clients, to be implemented starting from January 1, 2027, without publishing the new fee values yet. Another bank also announced a limited regulatory change, concerning customers residing in countries of the European Economic Area. Accordingly, starting from the beginning of 2027, the bank will not be able to initiate the presentation of some new products and services to them, while confirming the continuation of service for current products and that customers do not need to take action, and the announcement did not include the imposition of new fees. Notifying customers The Consumer Protection Standards issued by the Central Bank of the UAE require financial institutions to notify customers at least 60 days in advance of any permissible change to the terms and conditions of products or services, including fees, providing a clear language summary of the changes and a copy of the amended terms. Customers should not just rely on the heading ‘Terms and Conditions Update’, but should read the notices sent by their banks, especially the clauses relating to fees, digital authentication, data use and account closure, to ensure that the updates affect their banking products before they are implemented.