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|UK Banks Should Emphasize Track Record and Reputation to Attract Mass Affluent Demographic, says Ver|
|Monday, 18 July 2016|
UK banks looking to lure highly desirable mass affluent consumers need to emphasize their track record, reputation, and financial stability in order to win confidence, as these factors are of much higher importance to this demographic than to non-mass affluents, according to financial services research and insight firm Verdict Financial.
The company’s recent report, Mass Affluents: Product Holding and Preferences in the UK, found that while 49% of non-mass affluents chose their bank on the basis of having a longstanding reputation in financial services, this rose to 61% among mass affluents. A similar differential was apparent when looking at the importance of financial stability.
Daoud Fakhri, Principal Analyst for Retail Banking at Verdict Financial, states: “Despite exhibiting a higher-than-average level of confidence in their finances, mass affluents are still relatively risk-averse when it comes to deciding who they will entrust the day-to-day management of their money to.
“While this works to the obvious advantage of established banks, it presents considerable difficulties for the new breed of digital-only banks now entering the market. Not only do they have to contend with the unwillingness of consumers to switch banks, they will also face additional obstacles to consumer acceptance resulting from a lack of both brand awareness and a demonstrable track record.”
Verdict Financial’s report also found that mass affluents are significantly more likely to hold a packaged account, with 38% of these consumers having such an account compared to just 26% of non-mass affluents. Mass affluents are also more than twice as likely to own investment-related products, travel insurance, and health insurance.
Fakhri concludes: “Mass affluents are a highly profitable demographic, as they are more willing to pay for bank accounts with added features and they present many cross-selling opportunities. Although mass affluents may be harder to attract, it is well worth banks putting extra effort into bringing them on board, as the rewards will be considerable.”
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