Siam Commercial Bank will this year add 10,000 more "First" customers who have assets under management (AUM) with the bank from Bt10 million to Bt50 million by upgrading existing customers in small-business banking more than wooing new-money customers.
The bank launched its First Privilege Banking scheme in December 2012 to provide financial advisory services to affluent customers. The bank has 20,000 customers with AUM of Bt400 billion in this segment, of which 70 per cent are business owners and the rest top executives.
Pakachat Taychaburapanone, executive vice president and head of the affluent customer segment division, said a wealthy customer used an average of 2.5 banks, so it is not easy to woo new-money customers from other banks. What the bank must strive for is to be the main bank for wealthy customers.
Of the current 20,000 First customers, only 100-200 are new-money, she added.
To expand the number of First customers, the bank will upgrade existing customers with AUM of nearly Bt10 million. About 70 per cent of the target of additional 10,000 First customers this year will be business owners.
Most First customers are business owners who have a passion for growing their operations. According to a bank survey on the SME segment, such customers are interested in reaching out to the Asean market, especially Myanmar.
The bank will launch a "Myanmar 360 First Talk" seminar series to deal with customer requirements. The programme will provide exclusive business knowledge and information on all aspects of Myanmar.
The next step might provide an opportunity for the bank to offer financial services to First customers if they require funding to support their business in Myanmar, Pakachat said.
Pakachat said the bank would have to add 100 relationship managers to the current 200 to cover the new First customers because the financial-adviser ratio is set at one manager for 200 First customers.
A relationship manager must understand at least five asset classes to offer to First customers: cash/near cash, fixed income, flexible funds, equity and commodity.
First customers prefer holding deposit more than non-deposit investments in a ratio of 65:35, while the ratio for general customers is 80:20.
According to the bank’s survey, business owners can take high risk in doing business but keep a conservative policy in their savings investment because they are not familiar with investment instruments. Relationship managers, therefore, must help maximise returns and manage asset allocation in line with the customer’s risk appetite.
Several banks are focusing on affluent customers because their AUM is a crucial amount of total AUM. At SCB, of the total customer base of 1.3 million, 200,000 are affluent customers with AUM of Bt3 million to Bt50 million. The AUM of affluent customers accounts for 40 per cent of SCB’s total AUM.