Customer Segmentation in Australian Private Banking

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Customer Segmentation in Australian Private Banking
Market Report, March 2005, 2236 €

Description

IntroductionThis report look at the various ways private banks in Australia can segment their client bases to extract value.
Segmentation factors such as customer-value, life stage, sophistication and geographic situation are all explored and the merits of each are analysed.
The analysis is backed up by comments from high net worth individuals pertaining to their needs and preferences.ScopeThe report analyses the reasons behind segmentation of a private banking portfolio, backed up by interviews with senior private bankers and HNWsThe report analyses five segmentation scenarios; customer value, life stage, geographic situation, sophistication and source of wealthThe report draws conclusions based upon HNW sentiment and the findings of segmentation analysisHighlightsIt can be argued that HNW clients of a private bank have already been segmented and therefore the bank's job is done and a higher value can be extracted.
However, would it not make more sense for private banks to further segment this HNW clientele just as the retail base is segmented?Research of private banking websites will show that they all speak of individual attention and tailored services.
So if banks already know this, shouldn't they be looking to segment their client bases?As the Australian private banks seek to better service their clients and to build their propositions around relationships, here are two possible answers to consider namely genuinely tailored responsive service and two-way client defined communication.Reasons to PurchaseFind out what the benefits are of segmenting a private client base and how to go about segmentationFind out which segmentation scenario is best for your private bankFind out what high net worth clients want from their private banking institutions and how this translates into segmentation

Sommaire

TABLE OF CONTENTS

CHAPTER 1 INTRODUCTION 7

Who is the target reader? 7

How to use this report 7

Report Methodology 8

CHAPTER 2 WHY SEGMENT? 9

Segmenting a customer base 9

HNW diversity and backgrounds 10

Basic needs and sentiments 13

CHAPTER 3 SEGMENTATION SCENARIOS 19

Source of wealth 19

Customer value 24

Geographic situation 34

Sophistication and orientation 40

Lifestage 45

CHAPTER 4 CONCLUSION – THE HNW PERSPECTIVE 49

CHAPTER 5 APPENDIX 52

Definitions 52

AAGR 52

CAGR 52

Gini index 52

Liquid assets 53

Liquid asset bands 53

Research methodology 53

The Global Wealth Model 54

The UK sub model 54

Asia-Pacific sub model 54

Forecasting methodology 54

Datamonitor’s wealth numbers compared with others’ numbers 55

Bespoke Wealth Market Sizing 56

Further reading 57

Datamonitor Asia-Pacific Wealth Reports 57

Datamonitor Asia-Pacific Insight Reports 57

Datamonitor Global Wealth Service: Competitor Tracking 57

Asia-Pacific contacts 58

LIST OF TABLES

Table 1: DBS’ segmentation structure 15

Table 2: Wealth markets that have been modeled using the Global Wealth Model 56

LIST OF FIGURES

Figure 1: Methodology diagram and report structure 8

Figure 2: The forces behind financial complexity for HNW individuals 13

Figure 3: The HNW population can be segmented across a range of different dimensions 17

Figure 4: The nature of the customer base is one key restriction on revenue growth for the business 25

Figure 5: Presenting a customer value framework for private banks 27

Figure 6: Client profitability increases markedly with time and loyalty 30

Figure 7: The segmentation approach is based around the value attributed through the previous framework 31

Figure 8: Number and origination of overseas born Australian residents, 2001 35

Figure 9: There is a high tendency for Asians living in the UK to be self-employed 37

Figure 10: The distribution of the Australian population, 2001 38

Figure 11: Segmentation by sophistication 42

Figure 12: Managing clients into the broad segments 44

Figure 13: Basic product usage changes with lifestage and financial objectives 45

Figure 14: The distribution by age of the adult population is vastly different from the distribution of individuals owning more than AUD1m 47