This article first appeared in Personal Wealth, The Edge Malaysia Weekly, on Jan 11 - 17, 2016.

THE affluent segment is the new sweet spot for banks, which are coming out with more products and services that emphasise a banking experience that is more exclusive and lifestyle-oriented. 

Datamonitor, a market intelligence and data analysis provider, says the growth rate of the mass affluent population in Malaysia has been climbing steadily at about 6% annually. The number of people in this segment increased from 388,000 in 2011 to 492,000 in 2015 — almost 27% over the five-year period. 

Banks are tapping this expanding market, says Lim Wyson, head of consumer financial services at OCBC Bank Bhd, which has spent a considerable amount of time to understand the needs of this market.

“OCBC Premier Voyage, our metal credit card, for example, came about after considering the results of the research we conducted in October 2014,” says Lim. The credit card was launched in late November last year.

The research results indicated that there are five things in particular that affluent customers, who are savvy travellers, are looking for where air miles are concerned. The first is “no expiry date for air miles earned on their credit cards”, followed by “offering air miles redemption on any airlines”, “less cumbersome redemption process for conversion of air miles to flights”, “no administrative charge for the conversion of the card air miles to airline miles” and “no blackout periods for the purchase of air tickets”.

Lim says this is because frequent travellers spend a significant amount of time planning and researching each trip they make. This ranges from the choice of accommodation and airline to timing and planning their daily travel itinerary.

“We found that some people had unutilised or expired miles earned through frequent flyer programmes. In such cases, they needed to bear the additional cost of redemption or time taken to convert the points.

Today, they can redeem air miles for flights on over 1,000 airlines for any day of the year with no blackout dates and redemption fees with our card,” he says. 

Lim says the introduction of this product is a move by OCBC Premier Banking services to tap lifestyle trends. In the past, the bank focused almost exclusively on wealth management and personal relationship management propositions. 

“It is imperative that banks move away from transactions that are price-led to products that more relationally holistic. The current banking environment is very competitive with banks offering attractive rates and products. However, the main challenge is winning the confidence of customers as some of them may feel that banks are simply out to sell investment products,” he adds.

“At OCBC Premier Banking, we focus on building a strong holistic customer relationship through our solid pool of relationship managers as they are the link between the bank and our customers. They are well trained to understand the customer’s needs and provide the right solutions.”

Lim says the affluent individual can expect more digitally enabled services from the premier banking space in the future. “We think [the affluent] will continue to look for digitally enabled services to access information at their own timing and place of convenience and multi-channel communication services, such as phone, fax or email banking.”

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