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Targeting high-net-worth customers as a growth strategy

Jun 7, 2021 / Consumer Banking

While credit unions and community banks are often associated with small businesses and local families, higher-net-worth individuals and growth companies have a long history with these financial institutions. In fact, many have their own brand of private banking or wealth management for individuals and larger companies. Because these types of institutions have a deep understanding of personalized service and unique needs, the match makes complete sense.

Though some institutions may scoff at the idea of catering to this type of clientele, there are reasons to consider it. While private banking and wealth management may seem like services for the ultra-rich, they don’t have to be. For the most part, they are simply methods of managing money that are more complex than average.

A growing professional with multiple service needs, a senior interested in estate planning or a small business with overseas importing are just a few types of customers who may consider high-net-worth banking and a community bank or credit union. What tends to set them apart from the average customer is that the complexity of their issues makes it more likely they will require bespoke-style service. On the business side of banking, today’s entrepreneurs are just as likely to serve customers down the street as they are to reach someone across the globe. These types of international transactions can also require a different approach than everyday banking.

It may surprise even seasoned bankers to know just how much of a growing and important sector this is across North America. But how does an institution even begin to target this group?

Retain and grow with your customers

It is unfortunate, but some business or personal customers leave their banking brand after a certain financial threshold because they assume they require a big bank for their higher net worth needs. Assure your customers this is not true and apply your personalized, unique approach to their new situations. After all, a major selling point of high-income banking is above all a one-on-one relationship. Small institutions have already perfected these connections.

Make the right products available

It goes without saying that higher-net-worth customers frequently require different products and services compared to a typical middle-income earner. For example, this type of client often prefers to manage their business and personal finances from a global perspective. It is common to have links to another country for product sourcing, holding property and more.  As a result, it’s important your financial institution can provide requisite international payment services.

Provide more flexibility

This could be the most important factor for these customers. They are likely incredibly busy and are used to working on their own schedule. This can make visiting your branch for a general transaction difficult, especially since many smaller institutions have limited hours. Consider boosting your online presence and making common services easily available, no matter the hour.

Take advantage of digital

Many credit unions and community banks offer innovative products but limit their use and require an in-person visit. This is particularly true for those that allow international payments. Because those dealing in multiple countries may have to adapt to their time zone, it makes digital alternatives more of a necessity. If your branch offers international payment services, make sure there’s an option for online or mobile transactions.

Offer white glove service

This should be easy for most community institutions. When big banks try and attract new high-net-worth clientele, this is one of their key offerings. Those with significant assets may have less time and patience for an inconsistent customer experience. Luckily, credit unions and community banks are typically celebrated for their outstanding customer service levels. If this is combined with addressing the unique financial needs of this new group, it could be a winning combination for any institution.

With new digital banking options and apps cropping up all the time, it is more important than ever for local credit unions and community banks to consider every type of client.

The established style of “community-centric” financial institutions, with their individualized approach and commitment, is a perfect fit to service the high-net-worth segment. International capabilities to complement existing domestic services, combined with competent digital access and personalized service, can position your financial institution for success.

Stephen Kuhl, CFA, is head of financial institutions and strategic partnerships at Western Union Business Solutions.