Friday, 14 June 2024

BRI’s Prioritas programme to expand reach into affluent banking space

5 min read

By Sheena Marie Gaboy

Bank Rakyat Indonesia is setting new benchmarks in the burgeoning affluent segment in the country with its Prioritas programme, a robust suite of diversified investment vehicles backed by a differentiated market penetration strategy

  • Wealth management ecosystem of tailored solutions for BRI Prioritas
  • Prowlth integration and strategic alignment to corporate strategy
  • Addressing ESG financing

Indonesia represents one of the most compelling markets for consumer banking in Southeast Asia. Its affluent segment, in particular, holds great potential. Indonesia’s middle class more than doubled in the last decade and represents 58% of the country’s 185 million adult population.

However, more than 60% of the population do not have a lending, wealth management or insurance product. The penetration for banking products beyond basic deposit accounts is still at an early stage. Life insurance stood at 3% of gross domestic product in 2022, and mutual funds at 2.6%—far lower than its neighbours Malaysia (36%), Thailand (30%), and India (16%).

At the same time, the country is among the top 10 fastest-growing markets for affluent individuals in ASEAN, with an increase of 7% to 9% annually in this demographic from 2016 to 2022. TABInsights estimates that Indonesia has 2.25 million affluent customers with investible assets of more than $50,000 as of 2022. This number is expected to grow to 2.5 million in 2025.

Building a wealth management ecosystem of tailored solutions for BRI Prioritas

In a strategic move to capture a larger share of Indonesia’s affluent market, Bank Rakyat Indonesia (BRI) refined its approach through its BRI Prioritas and BRI Private programmes. The bank caters to some 113,000 affluent clients with investible assets ranging from $50,000 to $700,000 and operates a network of more than 6,500 branches across Indonesia. It also offers mobile banking to enhance customer experience. The programmes aim for rapid and efficient customer service, minimising wait times for essential banking tasks.

BRI Prioritas is building a multi-pronged strategy to elevate its wealth management services. This includes the use of advanced customer profiling, which involves categorising clients into six distinct personas to better tailor services. The bank is also in the process of implementing an integrated wealth management platform that centralises client onboarding, investment monitoring and transaction execution. Advanced analytics inform acquisition and retention strategies, complementing the bank’s strong physical presence.

To attract affluent individuals, the bank offers exclusive, invitation-only products like private equity opportunities. It is also entering the international investment arena, initially offering offshore products to its affluent customer base. The bank is responsive to evolving customer behaviours, focusing first on a hybrid model of digital tools and human advisors. This will eventually become a fully automated service suitable for a wider range of clients.

BRI is also enhancing its digital offerings, particularly for core investment features such as portfolio management, financial planning, and investment tracking. Some 50% of time deposit, mutual funds, and insurance products under the BRI Prioritas umbrella are digitally originated. Clients can also engage in equity and fixed income trading, as well as IPO subscriptions. However, there are notable gaps in the service offering, such as the absence of foreign exchange trading and online document signing, indicating opportunities for further diversification.

BRI Prioritas clients gain access to amenities like airport lounges and safe deposit boxes, as well as personalised perks like birthday gifts and invitations to networking events. Specialised financial advice is provided by certified financial advisors. The product suite covers a broad spectrum, from bancassurance products with a minimum annual premium of $797 to investment options like sovereign bond notes requiring a minimum placement of $7,800. A premium tier within the programme accommodates clients who have higher investment thresholds.

BRI’s Prioritas segment reported strong performance in 2022. New life insurance policies recorded a year-on-year (YoY) increase of 305% in 2022, and new investors grew by 147%. Further, the programme saw 30% YoY growth in assets under management, 14% growth in fee- based income, and 21% growth in government bond sales in 2022. The bank’s Prioritas Net Promoter Score reached a strong 69% in July 2023.

BRI’s head of wealth stated: “BRI always provides excellent service, as well as convenience and precision in responding to all customer needs. In order to accomplish our goal this year, we believe that rapid growth, digital first, and ecosystem first are the keys to scale up the wealth management business.”

Prowlth integration and strategic alignment to corporate strategy

To complement financial products and services, BRI’s Prowlth wealth management platform was developed in partnership with technology vendor Intellect Wealth. The platform serves as an ecosystem for marketing investment products, providing advisory services and offering up-to-date market information. Accessible via mobile devices, the platform provides a comprehensive analysis of customer portfolios and enables personalised investment guidance. Prowlth employs big data and analytics to identify customer needs, preferences and behaviours, which helps the bank to develop new products and services.

These offerings and initiatives align closely with BRI’s corporate strategy, aimed at establishing the institution as a leader in Indonesia’s banking sector, and promoting broader financial inclusion. A key focus within this strategy is enhancing and expanding wealth management services for affluent customers.

The Prioritas programme is not just about exclusivity and perks; it represents a strategic move by the bank to secure a significant position in the increasingly competitive wealth management landscape, supported by a diverse range of carefully curated investment and insurance products.

BRI’s wealth management platform equips advisors with tools to offer personalised investment advice and recommendations based on customer profiles, risk appetite, and current economic conditions. The platform also facilitates comprehensive portfolio analysis, including financial needs assessment. Advisors can access the platform via mobile devices. Using big data and analytics, BRI continually enhances customer experience by tailoring products and services to meet specific needs and preferences, thereby increasing customer satisfaction.

Addressing ESG financing

In the initial phase of addressing the ESG financing trend, BRI concentrated on educating customers via government sharia bonds, that made up 47% of total bond sales until Q3 2022. Over the pandemic years, BRI adeptly responded to customers’ leanings towards more conservative investment options by emphasising low-risk financial products.

BRI has successfully positioned itself as a vital cog in Indonesia’s financial machinery, offering a sophisticated range of products and services that stand as a testament to the bank’s adaptability and forward-thinking approach.

Keywords: Wealth Management, BMO Wealth Management, Investment, Customer Experience
Institution: BRI
Country: Indonesia
Region: South East Asia
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