Although the number of premium clients is small, they contribute the largest portion of a bank’s turnover. That is why banks have started to pay full attention to VIP clients by applying various marketing strategies, such as providing special interest rates, offering merchandise at discounted prices or offering personalized financial management.
There are various names for such services, with banks calling it personal, priority or private banking.
The premium banking market has a lot of potential as there are about 1.5 million people in the country with an average income of Rp 500 million per year. Some bank managers estimate the number to be double that.
As an example to demonstrate the size of the contribution to banks by premium clients, BCA says 80 percent of its assets originate from high income customers, making it no surprise that BCA is aggressively marketing BCA Prioritas. To join this program, a customer is required to deposit at least Rp 250 million. Currently, BCA serves its priority customers in special VIP rooms at 114 branches throughout Indonesia. In addition, there are also executive lounges at 20 main airports in the country. The bank also regularly offers such clients exclusive items at special prices, such as property, luxury cars, paintings and shares in line with the bank’s slogan for the products, “exclusively for BCA’s priority customers”.
Undeniably, today’s customers demand that a bank understands their needs specifically and individually. Wealthy clients demand not only topnotch services, but also return on investment, security and convenience.
These are some of the challenges faced by domestic banks in the form of private banking and wealth management with facilities that meet customers’ requirements. Also provided are personalized and customized services. Each customer is served by a special “relationship manager” who provides consultation and various facilities, including specially designed programs that cover banking and non-banking transactions.
It is not only BCA that is being aggressive in this field. Bank Internasional Indonesia (BII) also strives to keep its premium customers happy. On Aug. 27, the bank held an event called “Grandparents’ Day” in appreciation of its BII Platinum Access wealth management customers at Hotel Darmawangsa, South Jakarta.
The event was a family program offering activities for all members of a family — grandchildren, parents and grandparents — such as story telling, face painting, handprints of grandparents and grandchildren, T-shirt painting and a children’s performance. “All this is in line with our theme, family banking, which has been incorporated into BII Platinum Access,” said Sanjay Kapoor, director of BII consumer banking.
BII Platinum Access has been developed with the bank’s wealth management program as one of its priority services. BII also provides services that give clients end-to-end benefits through highly personalized service by trained investment staff.
Among the services and facilities offered by the bank are asset management, wealth management, special privileges, global information services, personalized assistance and worldwide services. Some of the products offered are bancassurance, mutual funds, time deposits and savings and checking accounts. Other investment tools are structured investment and government bonds.
BII Platinum Access was introduced in May 2003 and is available at branches in Jakarta (BII Thamrin, Wisma Mulia, Kelapa Gading, Pondok Indah and Puri Kencana), Medan, Surabaya and Bandung.
Wealth management is becoming increasingly popular. Next to BCA and BII, Bank Permata is also catering to this elite segment. Bank Permata has expanded its network by opening a new branch at Sunter Royal Jakarta to make it easier for clients in North Jakarta to access its wealth management products.
The bank has also teamed up with the Astra Group to attract customers. “With the extension of our networking, we are confident that it will be a positive contribution to both our company and Astra Group’s customers, who will get personalized service that is up to date and of high quality,” said Bank Permata director of wholesale banking Ongki W. Dana.
According to Ongki, Bank Permata presently has 5,000 premium clients with assets totaling Rp 8 trillion. The bank’s target for 2007 is an increase of between 12 and 15 percent and total funds of Rp 10 trillion.
Of course, not only domestic banks are active in wealth management. One foreign bank, HSBC, has launched HSBC Premier, while Standard Chartered Bank has Wealth Management Account. This priority banking product, launched in May 2001, has a minimum deposit requirement of Rp 100 million for individuals and Rp 150 million for corporations.
Among the foreign banks, Citibank is the pioneer in priority banking. The bank, with its local main office located in Jakarta’s Golden Triangle business area, calls its product Citigold Wealth Management Banking. There is a Rp 500 million minimum requirement.
Some of the services include investment and financial management planning, exclusive use of Citigold Center, such as safe deposit boxes, special merchant discounts and invitations to exclusive programs and events, like fashion shows, music concerts and seminars.
Citigold Wealth Management Banking, which was launched in 2002 and currently has about 20,000 clients, is an extension of Citigold Priority Banking, a Citibank product first introduced in 1980. While Priority Banking focuses on services with exclusive facilities, the Wealth Management focuses more on the management of clients’ funds deposited at the bank.
Indeed, banks can no longer serve very wealthy clients with just a smile and a promise to understand their needs. Private banking here is more than 10 years old. What is required is more customer-oriented services rather than product oriented ones.
Exclusive clients obviously need exclusive services. They expect tailor-made products and facilities, not run of the mill products and service. Although many alternative investments are available on the market, what is most important is to fulfill a client’s financial plan and targets. (Burhan Abe)
The Jakarta Post, October 07, 2007