Overview:

Introduction

Although mass affluent customers reportedly can generate four times as much revenue as retail customers, this market remains a difficult one for banks to serve well while maintaining profitability. Banks with mass affluent propositions need to know what strategies for customer acquisition, increasing share of wallet, product and service proposition, and customer service work profitably.

Features and benefits

* Our Global Wealth Model data and forecasts tell you how many mass affluent clients are in your target market, helping you to plan for future business
* Extensive mass affluent customer survey data covering Asia-Pacific, Europe and North America highlights what your clients want from your service
* In-depth customer targeting and product/service strategies highlight how your competitors are capitalizing on the demands of mass affluents.
* Analysis of three business models: banking-led vs. investment-led; relationship management vs. non-advisory; free bundled vs. fee-based bundled models

Highlights

Asian mass affluents are fairly unconcerned with getting good interest rates on their transaction accounts, and somewhat unconcerned with getting the highest interest rate on their savings account. They tend not to choose their transaction account based on bank charges, as they are instead attracted by advertising and familiarity with the bank.
Among the five banks in Datamonitor's analysis that do not offer relationship managers, only one offers an interest-free overdraft. RBS Royalties Private gives clients a £500 interest-free overdraft, while the remaining players have various fees and conditions on their overdraft offers
Unlike their Asian counterparts, Western European mass affluents do not look to financial products to help reduce stress, although they very much demand that their FS provider makes it simple to manage their finances.

Your key questions answered

* How many mass affluent individuals are there in my target country?
* What do customers most value in a mass afluent service in my country?
* How are my competitors serving the mass afflunet client base?

Overview 1
Catalyst 1
Summary 1
Methodology 1
Executive Summary 2
While mass affluents worldwide do share some characteristics, their differences have important implications for banks attracting and serving them 2
Mass affluent customers in Asia Pacific are attracted by advertising and familiarity, and listen to friends and family when it comes to financial advice 2
Mass affluent customers in North America are happy looking after their own finances, but want customization around the financial products they use 2
Mass affluent customers in Western Europe are time-pressured and want their bank to look after their personal needs 3
All mass affluent populations will grow in the next five years, but the highest growth markets will be in Asia Pacific and the Middle East 4
The biggest future opportunities lie in the East 4
The Mass Affluent Client 12
Defining the mass affluent customer 12
Regional mass affluent customer overview 12
Mass affluent customers in Asia Pacific 12
Mass affluent customers in North America 13
Mass affluent customers in Western Europe 13
Banking characteristics of the mass affluent client 13
Asian mass affluent clients are most likely to get financial advice from banks 13
Despite the proliferation of online banking, mass affluents use their branch to open accounts 15
Mass affluents are somewhat more rate-sensitive when choosing accounts compared to mass market consumers 17
Banking charges are less important to mass affluent clients than interest rates 20
Existing relationships matter to mass affluents when it comes to choosing a transaction account 21
Mass affluent motivations and decision triggers 23
Mass affluents want banks to make their lives easier and less stressful 23
Tailoring and control are important to mass affluents, which has important implications for bundled services 27
Advice and recommendations are moving out of the professional sphere for mass affluents 29
A bank's use of new technologies is expected by the mass affluent customer base 30
Mass affluents are time-poor and crave simplicity 32
The size of the mass affluent opportunity 33
There are more than 135 million mass affluents in 15 countries 33
The biggest future opportunities lie in the East 35
Business Models In Mass Affluent Banking 38
The banking-led model versus investment-led model 38
The banking-led model 38
The investment-led model 45
The relationship management model versus the non-advisory model 45
The relationship management model 46
The non-advisory model 49
The ""free"" bundled model versus the fee-based bundled model 50
Mass affluents' financial decisions are dictated by price and cost 51
Mass affluent ""privileges"" 53
Appendix 57
Definitions 57
Mass affluent 57
Methodology 57
Global Wealth Model methodology 57
The UK sub-model 58
""Other countries"" sub-model 58
Forecasting methodology 58
Datamonitor’s wealth numbers compared with other wealth numbers 59
Further reading 59
Ask the analyst 59
Datamonitor consulting 59
Disclaimer 60


TABLE OF FIGURES
Figure 1: The greatest mass affluent opportunities will be in Asia Pacific and the Middle East 5
Figure 2: Likelihood of going to primary bank for advice on savings, and on other financial products in the next six months (%), by region 14
Figure 3: Respondents who opened their main transaction account in branch (%), by region 16
Figure 4: Around a third of mass affluents are rate-sensitive when it comes to savings accounts 18
Figure 5: Respondents who said that low banking charges were the reason for choosing their main transaction account (%), by region 21
Figure 6: Respondents who chose their main transaction account due to advertising, and due to an existing relationship with their bank (%), by region 22
Figure 7: Respondents who use financial products to help reduce stress levels (%), by region 23
Figure 8: Respondents who stated that it is important to feel looked after by their FS provider, that they like to be offered a range of services, and that they like financial products to be targeted at their age group (%), by region 25
Figure 9: TBK Wealth Management centers its entire marketing campaign around lifestages 27
Figure 10: Respondents who want more control over additional services, and who think their FS provider should allow them to customize the financial products they use (%), by region 28
Figure 11: Respondents who take advice on their finances from friends and family (%), by region 30
Figure 12: Respondents who agree that financial services should embrace new technologies, such as mobile applications or social media (%), by region 31
Figure 13: Respondents who stated they do not have time to effectively manage their finances, like other people to look after their finances for them, or agree that their FS provider must make it simple to manage their finances (%), by region 32
Figure 14: Several countries outside the US had sizable mass affluent populations in 2009 34
Figure 15: The greatest mass affluent opportunities will be in Asia Pacific and the Middle East 35
Figure 16: Relationship management-led versus non-advisory mass affluent competitors 46
Figure 17: Rating of an interest-free overdraft, and personal contact for queries, as most important aspect of a premium banking service (%), by region 47
Figure 18: ""Free"" bundled services versus the fee-based bundled services 51
Figure 19: Respondents who stated that their financial decisions are dictated by price and cost (%), by region 52
Figure 20: Respondents who do not wish to be charged a fee for basic banking services, who would rather pay a small fee for basic banking services than large overdraft fees, and who are happy to pay a fee for premium banking facilities (%), by region 53
Figure 21: Features of premium banking services, as placed in the top three most important by respondents (%), by region 54
Figure 22: Mass affluent services' FS-related perks compared 56


TABLE OF TABLES
Table 1: Number of mass affluent individuals (000s), by country, 2005, 2009, and 2014f 36
Table 2: Number of mass affluent individuals (000s), by liquid asset band, Bahrain and UAE, 2009 36
Table 3: Number of mass affluent individuals (000s), by liquid asset band, US and Canada, 2009 37
Table 4: Number of mass affluent individuals (000s), by liquid asset band, UK, France, and Spain, 2009 37
Table 5: Number of mass affluent individuals (000s), by liquid asset band, Asia Pacific, 2009 37
Table 6: Banking-led mass affluent competitors 40
Table 7: Investment-led mass affluent competitors 45
Table 8: Mass affluents with home, buildings, and/or contents insurance, and travel insurance (%), by region 55