Banks eye 'young professional' market

Banks eye 'young professional' market
By Jo-ann Huang | Posted: 11 April 2011 2230 hrs

SINGAPORE: More young professionals are climbing up the corporate ladder, and that emerging affluent market is a new consumer banking segment in Asia.

With as many as 500 million emerging affluent individuals in the region, banks are stepping up their efforts to capture this growing customer base.

Citibank is using customised banking to target the emerging affluent segment in Asia.

It has launched new services including a 24-hour online secure e-chat with customer service reps, free global fund transfers to other Citibank accounts, and dedicated personal bankers.

Catering to the needs of this segment is one way to retain customers in the long-run.

In the last three years, more than 50 per cent of customers from their Citigold banking segment, which comprises individuals with between S$200,000 to S$1 million in investible assets, have upgraded from the emerging affluent or the Personal Banking segment.

Citibank Singapore country marketing director Jacquelyn Tan said: "We've seen a lot of emerging trends where increasingly our customers within this segment are increasingly more mobile.

"Our customers as well in such a fast-paced environment demand.....a high responsiveness... accessibility as well as convenience and personalised services for their banking needs.

Citibank is targeting countries like China, India and Malaysia for their new emerging affluent services.

Other banks are also jumping in on this trend.

By targeting the emerging affluent segment, UOB for instance, expects profits from this segment as well as its high net worth individual market to reach 50 per cent from 35 per cent in four years.

Standard Chartered launched its preferred banking service for the region's emerging affluent individuals in August last year.

The bank is hiring 800 staff by early 2012 to cater to this growing customer base.

However, banks have differing standards and definitions for the mass affluent or the emerging affluent market.

Citibank considers individuals with a net worth of US$10,000 to US$100,000 to be "emerging affluent".

For Standard Chartered, emerging affluent individuals are required to have investible assets of US$100,000 and above.

For products and services, analysts said US and European banks currently dominate the Asian emerging affluent market.

Fitch Ratings director of Financial Institutions Alfred Chan said: "They have all kinds of sophisticated products; some risky, some are less risky as we have learned from this crisis, so asian banks really need to pick up".

Emerging affluent individuals make up one-third of Asia's consumer banking revenue,and banks forecast this figure to rise.

They project an eight to 15 per cent growth in revenue from Asia's emerging affluent segment annually for the next several years.

-CNA/wk

- wong chee tat :)