The affluent segment in Asia, except for Japan and Singapore, tend to be more satisfied with their main financial institution than their mass-market counterparts, and they should be. Many of the banks in the region have tiered banking to create differentiation and separation for affluent customers. Take HSBC Hong Kong for example, which has three segments before private banking – “Personal Integrated Account” (also known as “SmartVantage”), “HSBC Advance”, and “HSBC Premier” for those with a minimum total relationship of HKD 5,000, HKD 200,000, and HKD 1million, respectively.
Many of these tiered programs are quite clear about what to expect from the programs with the premium programs offering a suite of benefits such as pre-approved credit cards, discounted rates and fees, access to priority branches and queues, and international banking services. With so much more being offered to the affluent segment, it comes as no surprise to see their higher level of satisfaction but does it necessarily translate to loyalty?
Not at all.
Even though the affluent segment in Asia is more satisfied with their main bank, they’re also more likely to be considering the switch out to another bank. The affluent use more banks than the mass market as they have more complex banking needs which exposes them to a wider arsenal of premium banking promotions, offers, and discounts in efforts to convince the segment to either start a new relationship or bank with them more. The constant marketing and the high appeal of the offers, such as some banks offering welcome gifts of large sums of cash, for example, leaves this segment feeling quite open on the idea of switching to a more rewarding and suitable relationship.
So what do the affluent look for?
Across Asia, the most important features the affluent look for in a new main bank is the internet banking, the large network of ATMs and branches, and competitive savings rates. These are the basic needs of the affluent and shows the importance of an omnichannel strategy as a starting block for engagement.
The need for both the digital and human touchpoints highlights the importance of understanding the affluent customers as many banks strive to cut costs and migrate customers from bricks and mortar to the digital realm. Equally important is the relationship manager (RM) which around 1 in 3 affluent in Asia state as a key reason to continue to bank with their main priority banking relationship. Some of our clients have seen a drop of about 10% in revenue per customer once their RM leaves the bank, with some clients leaving with them.
What we’ve seen is a new wave of developments from banks, such as Citigold India, which have launched the global first in-app chat for clients to connect with their bankers through audio and video calls. Citigold India’s HELLO app enables clients to communicate with product experts, RMs, branch managers, perform real-time transactions such as buying and selling mutual funds and upload documents with conversations stored in the cloud. The fusion of digital and channel is also happening in Singapore where we’ve seen DBS launch video teller machines for its customers across the island state.
While it’s very exciting to see the new wave of touchpoints being rolled out across the region, the road ahead will not be without and curves and bumps. It will be very interesting to see how banks adapt the way they interact with their clients, especially in the affluent space where the increasing mix of technology and staff will lead to more scrutiny from compliance and legislators.