Kiatnakin Bank lures ‘mass affluent’

 

The bank has developed three financial hubs in Bangkok to cater to the mass-affluent segment with investments between Bt2 million and Bt30 million. 

The financial hubs are unlike the bank’s normal branches, as they are venues for financial consultation to targeted customers, said Kiatnakin Bank president and chief executive officer Aphinant Klewpatinond.

The three hubs are in CentralWorld, Yaowarat and Thong Lor.

Kiatnakin will maintain 65 normal branches nationwide. As a small bank, it should focus on deposit and investment products for wealthy customers, while transactional banking should be provided by large banks, Aphinant said.

He said that before its merger with Kiatnakin Bank, Phatra did not have branches but catered to assets under administration of Bt350 billion. Deposits account for a small proportion of high net worth, but the major client base at Kiatnakin Bank is the mass affluent segment, most of whose portfolios are in deposits.

In the first phase after the merger, the bank focused on driving up the investment portfolio excluding deposits of high-net-worth customers, which increased by between Bt50 billion and Bt60 billion in each of the past two or three years, he said.

The bank’s mass affluent clients should have a total investment portfolio excluding deposit of Bt100 billion, up from only Bt15 billion currently, he said.

To cater to this segment well, the bank has to have tools such as mobile and Internet banking, unlike Phatra’s high-net-worth customers, whom it can service through investment advisory.

Each investment adviser services 200 customers, but if the bank expands its investment portfolio through mass affluent clients, it will need venues for providing financial advice to this segment.

Normal branches will be the referral base, where staff can earn revenue from insurance products and non-digital transactions.

The bank uses third parties such as B-Quik to provide car-title loans and Thailand Post to handle deposits and withdrawals.

Kiatnakin Bank has set up new business unit, an alternative distribution channel (ADC), to cater to small and medium-sized enterprises, personal loans and home loans. It has 400 commission-based salespeople and it raise that number to 1,000 next year, aiming to make ADC its second-largest driver of lending after its branches, Aphinant said.

Dr Anuchit Anuchitanukul, head of process and product improvement and the alternative channel group, said the bank would use ADC to build its SME loan portfolio through its new “KK SME Car3x” product. SMEs will be allowed to use automobiles as collateral for a credit line of up to three times the value of the vehicles.