Private banks and wealth managers in Taiwan are forced to change their business models from product-oriented sales to a more customer-centric, family-focused model.
This is difficult for decision-makers in leading Taiwanese banks to change to, as the island’s wealth management market is highly competitive with 39 banks doing some sort of wealth management, and battling each other to persuade clients to leave their current banks and bank with them instead.
But in a market that is “over-banked”, the key to retain and acquire new clients, according to a spokesman for CTBC Bank, is to focus on serving not the individual, but the entire family.
In a market with an aging population, and where more than 50% of people have not prepared for their pension and where nearly 20% of the population have not completed their wills, CTBC Bank believes it is well-positioned to capture opportunities following a decision to focus on families not individuals.
The bank was able to make the shift by launching a family membership programme in 2013. “The family membership programme can take care of family needs at different life stages, and satisfy the financial needs of elders, middle-aged, young people, and even children,” a spokesman from CTBC Bank says.
CTBC’s family membership programme, a three-tier level that categorizes clients based on their assets under management, was launched in April 2013, and because of its unique model in the market, the bank has seen its membership grow significantly. Since the family membership was launched, the bank’s number of households and family AUM grew 60% and 74%, respectively as of the end of 2014.
“CTBC Bank focuses on three points in our comprehensive family advisory service: to live better, to save more, and to inherit more. For each specific family needs, financial advisors provide customized advisory service and financial suggestions. CTBC Bank enhances advisory services by three main steps: solid fundamentals in place before customer contact; fulfilling customer needs by financial planning process and team approach; full follow-up service to protect customer assets and ensure customer satisfaction,” says the bank.
Improving family advisory services and building a professional team
As other leading banks in Taiwan have taken notice to CTBC’s strategy, including Cathay United Bank, Taishin Bank, and Taipei Fubon Bank, CTBC Bank has decided to continue to improve its advisory services for its household clients.
In focus are CTBC Bank’s services on tax and succession planning, integrated family cash management, and cross-generational services for family assets. These type of services have been mainly geared towards ultra-high-net-worth clients, but CTBC Bank is planning on bringing this to its high-net worth clients and the affluent class in the backdrop of competition in the market.
The spokesman said that CTBC’s usage of its family advisory services has been increasing.
The backbone of CTBC Bank’s family advisory services will be built on having a comprehensive team of specialist that will help it differentiate itself from the product driven business models that many banks in Taiwan are currently using. The team will consist of a financial planner, a financial planner intelligence officer, an insurance planner, and a portfolio advisor. These teams will be tapped upon the request of clients of any of the wealth segments.
CTBC Bank believes it can make itself closer to its household clientele and retain customer loyalty by offering services that are typical for the very wealthy to the rest of the asset class. This strategy has already allowed the bank’s wealth management department to have the most customers, sitting at a 12% market share.
