Now this is rather interesting. Bank of America has breezed some life into marketing to the mass affluent segment with the roll out of Bank of America Preferred Rewards, writes Douglas Blakey
Just what constitutes the mass affluent sector varies from bank to bank; Bank of America sets the bar at total household investable assets in the $50,000 to $250,000 range.
Go deeper with GlobalData
The Preferred Rewards programme is available to customers with a BofA current account together with $20,000 in combined BofA current/deposit or Merrill Lynch accounts.
The higher the combined balance, the greater the number of loyalty points earned.
Banking benefits include reduced interest rates for home loans, an interest rate boost for savings and fee waivers for non BofA ATM withdrawals.
Aron Levine, head of preferred banking and Merrill Edge Investing at Bank of America said: "The lower qualifying balance means more of our clients are able to participate in the program and earn greater rewards
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalData"The rewards are broader and reach across the bank, so more clients can experience all that Bank of America has to offer through one simple program."
According to research earlier this year from Credit Suisse, the mass affluent segment represents about 361m people globally and owns 42.3 % of global wealth, more than the 41% owned by high net worth individuals.
By the by, Credit Suisse’s test to constitute mass affluence is investable assets in the range of $100,000 to $1m.
Banks love this segment of customers; typical customers own their own home. They are early adopters of top-end IT and banking services such as tablet/smartphone banking; they have a higher cross-sell ratio and tend to be the customers looking for a closer relationship with their banks.
In brief: they are the profitable customers.
Quite why so many major banks have been dire at targeting and servicing the mass affluent segment remains one of the banking mysteries of recent years.
Every few months I seem to receive a report from one of the eminent consultancies arguing that the mass affluent segment continues to be the most underserved in the market.
When you think of mass affluent banking, which banks are top of mind: HSBC with HSBC Premier is a safe answer.
BBVA enjoys a good reputation in this sector; I recall a strong pitch from BMO Harris; in Poland, Raiffeisen springs to mind; Santander (with Santander Select) in South America. Citigroup, Standard Chartered, DBS and OCBC in Asia: fair enough.
Off hand, I cannot think of too many more that have really made a go of targeting the mass affluent……with apologies to all banks that have pitched me about how they have optimised this segment and I have not mentioned.
The issues for banks to tackle have changed little in recent years: staff training and rewards; optimised segmentation; how to reward customer loyalty; digital channels delivery; dedicated branches or separate areas for the mass affluent within the branch; mass affluent bank pricing.
It will be fascinating to see just how successful the Bank of America initiative proves to be.
