The growing number of well-to-do consumers has already captured the attention of the retail market, and now banks are getting on board: In early September 2007, HSBC announced the roll out of HSBC Premier — offering borderless banking and preferential services — which they describe as “the first truly global personal banking service for the world’s…mass affluent,” a demographic group that is variously defined as possessing between US$100,000 and $1 million in liquid assets and that has demonstrated a taste for luxury and exclusivity. Another early entrant to the field, Citibank, describes Citigold, which offers exclusive services and rewards to mass affluent customers, as a “premium banking relationship…designed to give you — and your finances — the attention you deserve.”
Mass affluent customers are mobile, sophisticated, and extremely busy. As such, they demand financial advisors with specialized knowledge, they want the ability to schedule meetings with these advisors flexibly and easily, and they put a premium on privacy. As one of several key findings of a Booz Allen Hamilton study of retail banking best practices shows, top-performing banks around the world are tailoring their services across all channels to adapt to the preferences of this small but increasingly influential segment.
For banks seeking to enhance their performance, developing offerings to attract mass affluent customers may be the key to raising their profile and reducing their cost-to-income ratios. There is still room for them to jump in, but each institution must weigh the economics of such a move and determine whether there is demand for such services in its market. For example, the higher assets and average balances of this segment justify the costs of introducing new, more expensive offerings for banks like HSBC. One study has noted that mass affluent customers are roughly 30 times more profitable than those of the mass market, and the global mass affluent segment is expected to grow by 35 percent between 2005 and 2010. Thus, navigating this path successfully, through improving traditional channels such as branches and call centers and expanding new services such as online and mobile sales forces, can be quite lucrative.
Revamp the Mainstays
Although mass affluent customers are increasingly interested in alternate channels like the Web, banks can still target them by enhancing their experience in the branch, and on the phone.
Branches. The mass affluent should be offered a differentiated service that evokes a sense of exclusivity. The best retail bank branches provide a hotel lobby–style appearance, concierge, and interactive information. Their staffs have immediate access to customer and product information, and meetings with specialists can be booked in advance.
Some banks achieve this sense of exclusivity by creating a separate floor for the mass affluent to do their banking. At Citibank branches in Asia, for example, Citigold members have access to a separate area with plush sofas, no lines, and the opportunity to sit down and privately discuss their service needs with an advisor. Although they may not meet with a dedicated relationship manager, they will meet with a special officer who deals only with mass affluent customers and who has access to their personal information. These advisors will be better trained, and have a broader range of skills across products.
Call Centers. Even as call centers are becoming a less popular purchasing channel, banks should still consider a segmented offering for mass affluent customers. Once in place, though, the centers need to minimize hand-offs and ensure fast connections to knowledgeable advisors.
Banks should offer dedicated phone numbers for mass affluent customers; they may call in to the same call center as all other customers (though they won’t know it), but their calls will be immediately routed to people who are specially trained to meet their needs. Some banks have made progress in this area: Citibank’s Citigold offers its customers an exclusive 24/7 toll-free customer service number; Credit Suisse assigns mass affluent customers an advisor whom they can call directly; the Bank of China, as well as other Chinese banks, offer 24-hour access to assistance by phone and guarantee an instant connection. In fact, banks in Hong Kong and China are setting the standard for customer service in call centers.