Growth of mass affluent population to return across all markets

Research*** by the independent business analyst has revealed that more than 5.7 million people slid out of the ranks of the mass affluent in the established markets between 2005 and 2009. At the same time, the mass affluent population in emerging markets such as India and China roughly doubled. While the research predicts growth across all countries, five key markets to watch over the next few years will be Singapore, Australia, Taiwan, Indonesia, and the United Arab Emirates.

Michele Gorman, senior analyst at Datamonitor, said: "The growing mass affluent population provides significant opportunities for banks, particularly HSBC, DBS, Standard Chartered, and Citigold, which already operate in countries like Singapore, where we predict strong growth."

A desire to customise

Although mass affluent consumers generate some of the highest revenues for banks, it can be difficult to serve them while still making a profit. The research has revealed that mass affluent consumers want to be able to customise the financial services they use. The implication of this is that a one-size-fits-all bundling strategy may not work. Instead, delivering a tiered offering that allows consumers to select the service that suits them would prove popular. HSBC already runs two-tiered services for its mass affluent clients, allowing them to pay for what they want most. However, the research shows that most mass affluent consumers do not want to pay for premier services, so they will need to be convinced of a strong value proposition.

Another key finding from the research is that affluent consumers want to feel like they are being taken care of by their financial services providers. This view does not vary significantly by country and is a key factor for banks to get right. Banks have the ability to offer this by giving them peace of mind through the services they offer. One bank that has launched a service specifically aimed at making mass affluent clients feel looked-after is Oversea-Chinese Banking Corporation in Malaysia.

Gorman continued: "Banks that tailor their services to the specific needs of mass affluent individuals will reap the rewards in the coming years, as the increase in the population of these consumers makes winning and maintaining their business increasingly important."

*Exchange rate at time of posting on site: US$1=R6.71.

Related research

**Established markets: the UK, the US, France, Spain, and Canada.
***Mass Affluent Banking

Source: © Datamonitor 2011