Rapid growth of the mass-affluent segment in Singapore offers strong business opportunities for banks to differentiate themselves. Citibank Singapore has a robust strategy in place to gain and retain a spectrum of wealthy clients in a competitive environment. Meghna Mukerjee speaks to Shrikant Bhat, MD and head of wealth management, and Zal Devitre, head of investments, at Citibank Singapore
The emerging affluent have been a rising force in Singapore, and across Southeast Asia. The pursuit of gaining mass-affluent clients’ wallet-share and building sticky relationships with them is highly competitive. Keeping this in view, Citibank Singapore, that operates as a local player on the island, is creating value for its clients in several ways.
Servicing the entire spectrum of customers, Citibank Singapore has strategised and segmented its client base in a manner that enables it to provide best-of-breed products and services to every user.
Citibank Singapore has well defined propositions for its customers in the affluent or Citigold segment, and high net worth (HNW) or the Citigold Private Clients (CPC) segment.
Shrikant Bhat (below), managing director and head of wealth management, Citibank Singapore, says these segmentations were created in 2010 in response to the changing customer dynamics – not only to address the growing mass affluent client needs but also the needs of those Citigold customers who were fast evolving into even wealthier clients, but were not yet ready for true-blue private banking services.
"These customers may not need the full bespoke solutions of private banks, and prefer customised services over priority services. Our CPC proposition is therefore geared for just the right level of exclusivity," he says.
Citibank Singapore defines private banking customers as typically those with assets under management of anything beyond $25m.
"These are the ultra high net worth individuals (UHNWIs), and the solutions they need have more in common with the investment bank, whereas, for the most part, our customers are better served through the consumer bank," he explains.
The HNW customers are defined by Citibank Singapore as those with at least S$1m in investible assets with the bank. To be a Citigold client, the customer has to have at least S$200,000 with the bank and S$1m upwards in assets under management for clients from Citigold Private Client.
"Emerging affluent clients start with the minimum transactional banking needs, and as they go up the wealth spectrum their needs from the bank evolve. Hence our propositions evolve accordingly," says Bhat.
Since Citibank Singapore launched its segmented value proposition, several other banks in Singapore have strategised similarly. The Citibank InterestPlus account, launched in 2013 and designed to provide affluent clients with higher returns as well as rewards, has been a successful product, and also replicated by some banks.
Zal Devitre (below), head of investments at Citibank Singapore says that Citibank has been associated with many firsts in the region. "In Singapore, thus, we’re seen as the bank that innovates and is customer focused," he adds.
In terms of investment vehicles, Citibank Singapore has a robust platform cutting across all customer segments. According to Devitre, in the post the financial crisis world, clients demonstrate a lower risk appetite and prefer products that offer transparency and liquidity.
"We also see clients wanting steady income – be it from fixed income or equities. But at the same time, we differentiate between our client segments and have propositions that speak to the needs of each segment.
"Our Citigold Private Client segment gives access to the full range of investment products such as private equities, hedge funds, derivatives, and more. For Citigold clients, we offer products such as mutual funds, and begin to introduce more sophisticated offerings such as structured products," he informs.
Citibank Singapore prides itself in leveraging its advisory capabilities for the mass affluent customers. "We assign each customer with a personal banker. We also have a structured advisory process and investment councillors on each team," adds Devitre.
Citibank Singapore boasts staff strength of 10,000, as well as approximately 25 branches and over 1,000 ATMs across the country. Additionally, it has multiple touch points across Singapore – having tied up with AXS – enabling over 1,500 points of distribution.
New clients almost always come through referrals, on the CPC end, whereas the sheer scale helps with client acquisition on the consumer banking side. Devitre points out that several customers grow through their lifecycle with the bank, starting out with a student account to eventually becoming a CPC customer.
Technology is a big mover for Citibank Singapore. "We’re in a new phase of providing smart banking," says Bhat. A priority on the IT side, Bhat informs, is to build scale. "Our go-to-common strategy is crucial. We’re building a common platform via which every single customer is able to get similar features, accessible anywhere in the world.
"For instance, if we have the Citibank InterestPlus account that’s built in Singapore, it should be accessible to customers in other markets through the common platform. This is a challenge, though, as we’re developing our unique businesses in specific markets and, at the same time, trying to serve a common platform globally."
Bhat also affirms that the customer preference is strongly geared towards simplicity – another IT priority for Citibank. "Customer surveys often show that there’s too much choice, and processes are too complex.
"We find that the transaction banking customers like easy, DIY-type solutions. We have built on that by leveraging our global strengths," says Bhat. The results have been functionalities such as Citi Global Transfers – allowing instant transfer of funds cross border. In Singapore, the feature enables instant fund transfers across banks.
"On the wealth side, we are one of the few banks with a full suite of products online, covering foreign exchange, brokerage, mutual funds, and a portfolio tracker that provides an interactive overview of clients’ holdings and performance across asset classes," adds Bhat.
However, despite "closely watching and working on the technology space", according to Bhat, wealthy customers still rely heavily on the human touch – particularly customers in Asia. "That’s why we are the only bank that provides a personal banker for even the emerging affluent clients," he says.
Speaking of the ‘three P’s’ in banking – products, process, and people – Bhat says that while most retail banks have similar product sets, the delivery process of those products is key.
"We have processes in place for our bankers to know what’s happening with their customers regularly. We give them enough tools to manage their client relationships successfully and proactively."
In a high-growth region such as APAC, where the demand for talented RMs is high, Citibank Singapore has a strong focus on managing its people.
"We spend time on talent management. We hire people who have the right values – beyond the industry trainings – and given the plethora of roles that Citigroup offers, we make sure they stay motivated and have career progression. Every CPC RM has grown through the ranks, starting with a personal banker role. Thus, we have a much lower attrition rate than the industry average," he says.