KBank sees the wisdom of catering to wealthy clients
June 26, 2014 00:00 By SUCHEERA PINIJPARAKARN
KASIKORNBANK is putting more emphasis on its wealthier clients, as this segment generates higher income for the bank than run-of-the-mill customers, and it has made a considerable investment in products and services under its "Wisdom" programme.
The service includes Wisdom Lounges. KBank executive vice president Pakorn Partanapat said some of these were in bank branches and luxury hotels, while the latest one is at Central Embassy, a new high-end shopping mall in Bangkok.
KBank has invested more than Bt70 million to install 1,602 “intelligent” safe-deposit boxes in the Wisdom Lounge @ Central Embassy and the Wisdom Lounge @ Siam Paragon.
A Wisdom client is defined as one with assets under management (AUM) with the bank of at least Bt10 million. Customers in this segment hold around seven products on average, compared with three held by middle-income clients and two by mass customers.
However, KBank’s portfolio of Wisdom clients is only growing by 3 per cent a year, while the slightly poorer “Premier” segment – those with AUM of less than Bt10 million but more than Bt2 million – are increasing at a rate of 8 per cent annually. And Premier customers are looking for financial advice on increasing their wealth long-term, which means they could eventually graduate into the Wisdom category.
Nationwide, individuals with AUM of at least Bt10 million total 153,000, of whom 118,000 are KBank customers. However, only around 20 per cent of these 118,000 use KBank as their main bank, and it wants to improve that percentage.
KBank this year will actively promote its lounges and the Wisdom brand to urban markets upcountry to increase the proportion of wealthy customers and boost AUM by 10 per cent from Bt1.1 trillion. The bank this year will open 47 new Wisdom centres and lounges from 87 currently.
Gross domestic product upcountry has been growing by double digits annually against single digits in Bangkok. Also, the approach of the Asean Economic Community is leading to an influx of cross-border trade, so KBank will promote its Wisdom brand to nationals of other AEC states running businesses in Thailand as well.
KBank plans to add a Wisdom Lounge to its upcoming Vientiane branch to tap wealthy Laotians after it observed rich Lao among its Wisdom customers in Udon Thani province.