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Maximising Value from U.K. Affluent Consumers

By KIM PURCELL

Affluent consumers are valuable to financial institutions because of the revenue that their higher credit and debit card spend, borrowing, and deposits generate.

In the new economic environment, financial institutions that possess total payments relationships with customers—including both credit and deposit accounts—enjoy a distinct advantage in maximising and sustaining profits.

Institutions that have these kinds of relationships with the affluent can leverage them to solicit other products and services across the institution. The critical first step is for financial institutions to understand and maximise the drivers of their own profitability. The second is to use flexible rewards and superior customer service to attract and retain affluent relationships that optimise profitability. The third is to design product bundles that maximise profitable relationships across the deposit and credit sides of the business. Finally, issuers can maximise affluent consumers’ contribution to profit by adopting relationship-based, rather than product-based, profitability measurements.

1. Bank of England and British Bankers Association; MasterCard analysis.

The Value of Affluent Consumers’ Credit Card Business Increased Significantly in 2009

Note: Does not include revenue from fees.

Sources: Bank of England and British Bankers Association.
Analysis: MasterCard.