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.