Tapping into rich clients through privilege cards

Tapping into rich clients through privilege cards

Rudijanto, Contributor, Jakarta

The continuous hunt for affluent clients has picked up among
banks but, unlike the tapping of middle- and low-level clients,
banks are not doing it with promises of spectacular rewards or
prizes such as luxury cars and a huge amount of cash but more
with what these holders of premium cards actually desire.

Though comprising less than 3 percent of total bank clients,
premium clients constitute major contributors to the total funds
absorbed by the banks. No wonder that for these special clients
the banks offer premium cards that promise a variety of benefits.

Given special cards with specifically selected terms such as
PrimaGold, BII Platinum Access and BII Syariah Platinum Access,
Amex GoldCharge and Citibank Platinum, these clients have to open
an account of up to Rp 1 billion (about US$117,600) with the
respective banks or have an annual income above a specified
amount.

Such amounts entitle them to become a member of an exclusive
group with other premium card holders. Banks usually consider
these clients an affluent group that must be provided with
specially formulated benefits or even tailor-made services.

Each bank has its own formula to cater for the needs of these
high-end clients. They offer a variety of individual benefits
with an emphasis on family, such as family-related, traveling and
education, and wealth management programs.

Bank Internasional Indonesia (BII) director of consumer
banking Rudy N. Hamdani emphasizes that the benefits provided for
holders of BII Platinum Access and BII Syariah Platinum Access
are mainly focused on individuals and their families, such as
life and education insurance.

"To have these cards, clients should have a deposit of at
least Rp 1 billion in our bank," Rudy said.

But holders of these two prestigious cards can also take
advantage of Platinum Access Centers. Among the services provided
in these centers are wealth-management services, including access
to various investment products.

"We offer safer investment products such as mutual funds
because shares in the stock market always fluctuate. Our client
track record shows that they are more conservative types. That is
why we offer them safer investment products," Rudy added.

Currently, BII has six Platinum Access Centers, of which three
are located in Jakarta, with the rest in Bandung, Surabaya and
Medan. Rudy expects each center to bring in 1,000 customers this
year.

While other banks consider a minimum deposit of up to Rp 1
billion as a requirement, Citibank does not link the amount of
money deposited or the credit limit that the cardholder may have
in order to get the bank's Platinum Card.

But Citibank emphasizes that the Platinum Card is positioned
as the most prestigious card in the world that also provides a
high credit limit. For this card, Citibank uses the "by
invitation only" method on prospective customers.

Citibank does not limit the benefits for Platinum cardholders
to only family and education but also offers unlimited and
exclusive services in a variety of areas such as shopping,
business, vacation and travel with first-class carriers and
accommodation throughout the world.

As a business and leisure companionship, Citibank Platinum
Card also provides emergency payment, legal and luggage
assistance, medical travel emergency services and many other
personalized services.

American Express (Amex) is also attracting more affluent
clients through its Gold Charge Card. The bank says that the Amex
Gold Charge Card has been globally acknowledged as one of the
most prestigious of its type.

Among the benefits offered by the card are a special financial
facility for those who travel frequently, in which overseas
purchases are charged in US dollars and purchases made in
Indonesia are charged in rupiah. This facility reduces currency
fluctuation risks.

As with other banks, Bank Danamon has been quick to tap the
immense potential of this upper segment. The bank studied and
evaluated its formula to grab more clients from this segment in
June and July of last year. Early this year, Bank Danamon
launched its new concept to attract affluent clients through its
PrimaGold Card.

"What differentiates us from other banks is that we focus on
individuals but we can also solve their business-related
problems," Carolina Dina R.S., executive vice president for
customer wealth management, said.

Underlying this approach is the basic conviction that affluent
clients rarely have family concerns, since all their family-
related needs have already been taken care of. Carolina believes
these affluent clients are more concerned with developing and
managing their wealth and businesses.

While this approach is not that much different from the wealth
management of other banks, she emphasizes that the difference is
in the fact that other banks usually separate wealth from
business management.

"What we offer to these clients is totally relationship-based.
Our motto is we take care of you and your business," said
Carolina.

With such a concept, a client's need for credit is also taken
care of without asking the client to go to a different service
section of the bank. In other words, Bank Danamon offers its
premium clients a one-stop service.

Like BII, Bank Danamon also offers various investment products
in its investment galleries, which are connected online with the
Jakarta Stock Exchange. The bank provides a fund consultant to
guide PrimaGold cardholders in selling or buying stocks.

Currently, Bank Danamon has 10 hubs that serve to attract
these affluent clients. Each hub has 10 spokes. With all its hubs
and spokes, the bank is aiming to increase the number of its
affluent clients by 50 percent this year.

Banks say that the ongoing campaigning and legislative
elections next month will have no significant impact on their
clients, although many people fear that these political events
might incite political conflict and social unrest.

"I don't see any impact from the election because I think
affluent people have decided to stay and expect a windfall from
whatever is happening here. They lost so much opportunity during
the last crisis when they took out their funds and the interest
rate sharply increased," Carolina said.

BII's Rudy also expresses optimism on the prospect of grabbing
more clients through BII Platinum Access and BII Syariah Platinum
Access this year. Apart from targeting a significant increase in
affluent clients, he is also trying to maximize the funds of
existing affluent clients.

"As of now we have over 3,340 affluent clients with savings
and deposits amounting to about Rp 9 trillion. Their number is
certainly smaller since they constitute only around 0.3 percent
of our total clients," Rudy added.

Competition among banks will be tougher this year as more and
more banks target affluent clients. Most of the banks use
personal approaches to net this particular market.

To intensify the contacts, Bank Danamon has trebled the number
of its Personalized Relationship Officers (PROs) compared with
last year's total. All banks are also continuing to develop their
programs, including offering tailor-made benefits.

"But the most important thing is that we have to deliver what
we have promised to them, and to continue with the development of
community networking because a satisfied client will tell his or
her friends about the services provided by our bank," Carolina
said.

The fight is tough, though, as banks seem to use literally any
method to attract existing affluent people, including those who
may have become their competitors' clients.

Just like the saying, "money has no nationality or knows no
boundary", the banks cannot expect loyalty from their affluent
clients. If they throw only peanuts, they should not be surprised
that affluent clients will not emerge, but monkeys.