Bank of Ayudhya or Krungsri is going after the emerging affluent market by launching an online financial planning service called "Plan your money" for customers with monthly income of Bt15,000 and above.
The bank already serves high net worth (HNW) customers with assets under management (AUM) of at least Bt5 million through Krungsri Exclusive, which has financial planners giving face-to-face advice.
Kris Chantanotoke, executive vice president of wealth management, said yesterday that the bank has 29,000 HNW customers with total AUM of Bt300 billion. Compared with the bank’s total assets of Bt800 billion, HNW customers are important to the bank. Emerging affluent customers with monthly income of at least Bt15,000 number about 700,000-800,000.
Even though Thailand’s savings-to-gross domestic product ratio is only 31 per cent, behind Indonesia at 32 per cent, Malaysia at 35 per cent and Singapore at 47 per cent, there’s a growing trend towards saving and investing through deposits, mutual funds and insurance policies.
The low savings rate presents an opportunity for the bank to approach the emerging affluent about holding more products and creating wealth.
The number of general customers particularly white collar workers earning Bt15,000 a month has been increasing in line with government policy. In Bangkok alone, the percentage of individuals with monthly income of Bt15,000 rose to 42 per cent as of the end of the second quarter of this year from 37 per cent as of the end of last year.
This kind of customer requires financial planning and investment guidelines just like wealthy individuals do but the delivery of services will be through the electronic channel instead of face-to-face, he said.
Customers can access Plan your money via three channels – the call centre where trained staff are prepared to give advice to customers, bank branches and the website, which is designed for users to make their own preliminary calculations and money allocations.
Compared with Kasikornbank, the leader in financial planning in the banking industry with its K-Expert service, Krungsri has fewer trained staff because KBank has a bigger network, so Krungsri has emphasised e-financial planning.
Before building their wealth, people should know their financial status and understand financial information. Plan your money is an option for those who are interested in saving and investing.
In the banking industry, there were at least three players in the financial planning market for general customers and Krungsri is the fourth. It decided to enter the market because it believes full financial planning information will help the cross-selling of investment products and boost the number of wealthy customers in the future.
“In three to five years, Plan your money will be the leading service in terms of brand awareness and customer base. The financial planning service for general customers cannot be evaluated by assets under management like wealthy customers but we hope the percentage of product holding will be increased by the Plan your money service,” he said.
Since the soft launch of the service two months ago, some 100-150 customers a month have sought consultations on saving and investing.
The bank would aggressively promote the new service next year with a target of 5,000 customers seeking counselling with its staff.
“We will recruit more staff from less than 10 employees because next year we will increase our branches with this service to 20 from two this year,” he added.