IT is indeed an outstanding achievement. Within just a relatively short time the UOB Buana Platinum credit card, which was launched last August, has succeeded in netting more than 80,000 customers.
According to Iwan Notowidigdo, executive vice president/head of unsecured products, Personal Financial Services of UOB Buana, the success is largely due to the good reputation of UOB (United Overseas Bank) Limited. Currently, UOB, the major shareholder of UOB Buana, is actively developing and expanding its market share in the Asia Pacific, including Singapore, Malaysia, Hong Kong, Thailand and now Indonesia.
For the bank, Indonesia has potential. "The number of rich people here is growing, while although volume wise it is small their purchasing power is very large," said Iwan. That is why among the various credit cards issued by the bank, the platinum card is heavily relied on to generate further business.
Similarly, other banks also target wealthy customers via their platinum credit cards with a credit limit of Rp 50 million. No less than Bank BRI, which is known as the bank for common people, issues platinum credit cards.
The reason why banks are rushing to serve premium clients is because although their number is relatively small they contribute a lot to a bank's business. Banks have turned their attention to these VIP clients by applying various marketing strategies, such as special interest rates, offers of merchandise at discounted prices and personalized finance management. The banks call such services by various names, such as personal, priority or private banking.
Thus it is understandable why last year BRI, which was established 112 years ago, also launched its priority service, BRI Prioritas. "Through this product we intend to provide our VIP clients, or selected individuals, with utmost convenience in services," said Susilo, head of finance and consumer services at Bank BRI.
Indeed, the number of affluent people or high net worth individuals is on the increase in the country. Reliable research indicates that, along with similar growth in Asia, there will be 785,000 wealthy people in Indonesia by 2015.
Mark Schroeder, an Australian financial consultant, acknowledges that the potential for wealth management in Indonesia is quite huge and therefore related services are booming. "I was surprised to hear that the country has 22 million wealthy people, which is 10 percent of the population. This number indeed has great potential for wealth management products," he said on the sidelines of the International Wealth Management Conference in Jakarta last year.
These high net worth clients demand special services from banks, which are rushing to pamper them. BRI Prioritas offers various convenient banking services that suit the customers' high lifestyle, and all are combined with international premium services. There is also a lounge, called Priority Services Center, located at the BRI I building on Jl. Sudirman, South Jakarta, for customers to avail of.
In short, highly valued customers can enjoy a long list of special services, such as transactions that are almost limitless, financial and investment consultation, purchase of shares, insurance (bancassurance), pension plans and speedy service. All this is just part of wealth management.
Wealth management is not a new concept for banks. It is targeted at wealthy people who do not know how to manage their money or do not know how to make good use of it. Here the banks' financial consultants play a major role in seeing to the further development of wealth both through banking and non-banking channels. Of course, the financial consultants have to be very shrewd in managing clients' money and producing results in order to gain their confidence. The clients are also assured of security and exclusivity. Apart from gaining a fee-based income for the bank, wealth management is intended to create added value for premium clients.
However, not all banks in Indonesia have succeeded in applying wealth management in its fullest term. They have basically provided this service by labeling it personal, private and priority banking, but at most banks it is only a part of general customer service, and not a special division. In any case, wealth management products in Indonesia have become an important trend. This can been seen in the fact that more banks are enthusiastically providing such services and at the same time have increased their sales and revenue. Even non-banking financial institutions have had success with such products. Manulife Financial Corporation, for instance, recorded a sales figure of more than US$11 billion last year, while Citibank predicts a growth of 35 percent in its wealth management products sales per year in the country.
To reach its target Citibank has also studied the application of sharia banking as wealthy individuals who would be interested in this are thought to be numerous. Citibank's vice president of retail banking, Meliana Sutikno, said that Indonesia was among the top 10 countries with a fast growth of high net worth individuals. "Each of these individuals has a wealth of at least $1 million. Our target of clients is about 150,000 each with wealth of between $1 million and US$10 million," she said. (Burhanuddin Abe)
The Jakarta Post, February 21, 2008