For StanChart and its peer group, the stakes
are huge. Mass affluent customers, generally defined as consumers
with around $100,000 in liquid investable assets (excluding primary
residence), are regarded by many banks as roughly 20 times more
profitable than those of the mass market.

“This banking segment is growing at 12 percent
CAGR in Asia, which is more than double the rate of growth in
western markets,” Mee Har Foo, global head of premium banking at
StanChart, told RBI. “The needs of this segment have
largely been underserved and banking relationships are
fragmented.”

As for the timing of the relaunch, Foo was
succinct: “There is no better time for us to bring our Priority
Banking… [It will] enable us to aspire for a leadership position in
many of our markets.”

The rebirth of Priority Banking comes two
years after HSBC adopted a similar strategy with the hugely
successful relaunch of HSBC Premier, its mass affluent offering
which it restructured as a fully integrated product line. HSBC
remains committed to a target for Premier, which has 2.6 million
customers currently, of 6 million clients by 2011.

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HSBC Premier is already available in 41
countries, with more planned for the remainder of 2009. A
spokesperson for the bank told RBI: “Premier has helped
HSBC penetrate emerging wealth markets, but the UK, US and Hong
Kong remain the bank’s biggest [mass affluent] markets.

“Recent Premier launches in Russia and
Columbia have extended its geographic reach and we continue to
assess opportunities for expansion and will continue with more
markets in 2010. Given our global presence, HSBC is one of the few
banking brands that can sustain an offering such as this in so many
markets.”

StanChart aiming for 15 million
people

Ahead of its own mass affluent
refresh, StanChart’s research concluded that in its eight target
markets, China, Taiwan, India, Korea, Hong Kong, Singapore,
Malaysia and the United Arab Emirates, the number of people with
more than $100,000 in investible assets grew to 15 million in 2008
from 9 million in 2003, with China contributing 74 percent of the
net growth and India 13 percent.

In each key market, the bank has kicked off an
integrated marketing campaign, complete with a new logo and
refreshed brand identity, flagged up by an advertising campaign
which will run in its first stage in late July and throughout
August.

According to Foo, customer risk appetites have
changed substantially as a result of the financial crisis, with
wealthier clients simply looking for banks they can trust. It is a
sentiment Foo contends the bank is well placed to tap into.

“StanChart is uniquely positioned in the
current market,” she said. “The fundamentals of the group remain
very strong – we are highly liquid, strongly capitalised with a
conservative funding profile and have a firm grip of risk and
costs.”

The thinking behind the various elements of
the Priority Banking proposition was, said Foo, “designed to
highlight Priority Banking’s approach of providing a comprehensive
relationship banking programme anchored on three key pillars:
privileged services, unique benefits and expert solutions.”

In particular, in an effort to differentiate
the service, StanChart has introduced a number of new components to
its Priority Banking service, including:

• What the bank describes as a unique loyalty
programme, that rewards customers (in selected markets) for their
total banking relationship, including deposits, investments, loans
and mortgages and not just based on credit card expenditure. Foo
said: “This is a definite first in many of our markets.”

• ‘Preferred’ status for the whole family:
customers’ spouses and children will receive the same privileges as
clients, including access to the bank’s more than 200 Priority
Banking centres.

• Cross-border portability: customers will be
able to take their accounts, credit history and banking
relationships with them wherever they choose to live and work, as
well as the ability to open accounts without traveling overseas.
The service also offers one global view online of all accounts
held, irrespective of the country origin of the accounts.

• A dedicated relationship management team
comprising qualified and trained personnel; experienced product
experts in investments, foreign exchange, insurance and lending and
dedicated service support at Priority Banking centres, branches and
call centres. “This is,” said Foo, “a change from the usual
dependence on a single relationship manager.”

The bank has also invested in its distribution
platform, introducing express lanes at branches, as well as
offering Priority customers their own telephone banking service,
while an extension of the Priority Banking network is also on the
radar.

“We currently have about 200 Priority Banking
centres across our emerging markets footprint along with dedicated
priority teller counters across many of our branches. We are
definitely looking to grow this in line with our refreshed offering
and differentiated customer experience,” explained Foo.

Faster turnaround times for loan applications
is also on the agenda, with decisions within 24 hours promised in a
number of countries.

6 million customers for HSBC
Premier

HSBC heralded the 2007 relaunch of
its Premier mass affluent service by unveiling its biggest
worldwide marketing campaign since the ‘the world’s local bank’
initiative which began its run in 2002.

And, by any definition, the campaign has been
a huge hit, with the number of customers using Premier growing for
the ninth consecutive year in 2008, to more than 2.6 million (up
from 1.9 million in 2007).

The importance of the mass affluent segment to
the bank’s bottom line was highlighted by HSBC’s chairman Stephen
Green at an investor presentation in 2007, when he said that the
bank was aiming to achieve average revenue per Premier customer of
over $1,000 by 2011.

In Hong Kong and India, an initiative in 2008
to increase referrals across customer groups resulted in a two-fold
rise in the number of Premier account referrals, and significant
growth in referrals from its personal financial services unit to
commercial banking.

Similar programmes in the UK contributed to
sales of Premier accounts and mortgage products, and plans are
underway to extend these programmes to other regions in 2009 while
the bank has rolled out seven HSBC Premier centres in Japan in the
past year.

The spokesperson for HSBC confirmed the
current network of 300 Premier Banking centres was set for further
expansion. “We are always looking for opportunities to expand,” he
concluded.

Another UK-based but globally focused bank is
also expanding its mass affluent service. On 14 July Barclays
rolled out its Premier Life proposition into the United Arab
Emirates. In the UAE market, Premier Life is aimed at individuals
earning between AED20,000 to AED50,000 ($5,400 to $13,600), though
unlike HSBC’s Premier service, Premier Life from Barclays comes
with a monthly fee of AED100 ($27).

Premier Life customers get a range of products
and services including life insurance cover, free remittances, an
annual fee waiver on credit cards and discounts on travel.
Additionally, Premier Life customers can use “state of the art”
branches in Abu Dhabi and Dubai.

Barclays says it launched the service in the
UAE after conducting detailed research of the market which
indicated that the segment was relatively untapped and under
serviced, with 300,000 potential clients.