Kiatnakin Bank targets white-collar 'mass affluent' segment
Kiatnakin Bank (KKP) will strongly pursue mass affluent clients via its Phatra Edge wealth-management service, as this category is a growing segment for the bank, while the competition for the high-net-worth (HNW) segment is more intense.
"Mass affluent" means customers with assets under administration (AUA) of Bt2 million to Bt30 million, serviced by Phatra Edge, while an HNW customer has AUA of more that Bt30 million and is serviced by Phatra Wealth.
Kulnan Tsanthaiwo, first executive vice president and head of KKP’s priority banking group, said the mass affluent segment would be the key focus for the bank next year. This segment is a growing market, and if the KKP can help increase these people’s wealth, they will stay with the bank.
The HNW segment is experiencing fierce competition, so the bank considers that it should extend its wealth-management business to the mass affluent segment. These people are white-collar workers who are the backbone of the country, and want to have enough wealth for their retirement.
Savings accounts and provident funds are not enough to build wealth, so financial advice is essential for these people as well as HNWs, she said.
Financial service for this category might be different from that for HNWs. Online services and smart call centres will be the main channel to access these customers.
The bank has created five types of investments. KKP clients are concerned with capital preservation and income, while Phatra Securities’ customers go for the fifth category, growth investment, as they can accept the high risk.
"We are attempting to encourage the bank’s customers and the Phatra Edge customers to invest in the third category, strategic asset allocation, because this investment is not very high-risk compared with the high returns," Kulnan said.
At present, the bank has around 1,000 mass affluent customers with AUA of Bt10 billion. "We target AUA of Bt80 billion within three years," she said.
KKP projects total AUA in 2016 to grow by 20-30 per cent from Bt600 billion currently, of which Bt300 billion is with Phatra Edge and Phatra Wealth serviced by Phatra Securities, and the rest is deposits in the bank and investments through KK Trade.
The bank has launched a video titled "The Dream" that underlines the falling value of cash savings and highlights the importance of alternative investment through asset allocation to achieve better returns than bank deposits while also facing less risk than investments in stocks or gold.
TRIS Rating yesterday assigned a rating of "BBB" to KKP’s proposed issue of up to Bt3 billion in hybrid Tier 2 capital securities.
