MANILA, Philippines - If you ask Ron Logan, HSBC SVP and head of Personal Financial Services, where the future wealth is going to come from, he will tell you unequivocally that it is coming from this part of the world — Asia.
As banks and consumers around the world are grappling with the new normal, consumers in Asia, particularly the Philippines, are having less of a difficult time compared with western countries.
“We’re not in hard times,” Logan says of local spending. “We’re in slightly tighter times. In many ways, the cards business here has not been as seriously affected as other countries. We’re still seeing people going to the malls and spending. If you look at the BSP’s statistics, the whole banking system is still seeing positive growth. We’re seeing people spending at about the same level as last year, although they are being more sensible about it. The crazy spending years are gone, but we’re definitely seeing a lot more spending than other countries.”
Don’t be surprised, too, when he tells you that women outnumber men when it comes to the client base of HSBC Premier MasterCard or that this segment — along with OFWs — is one of the fastest-growing markets in the bank’s affluent client base.
“The financial patriarch of the family is more often the female,” says Logan. “I think it’s because women tend to look more after the family finances. The other aspect is that women are increasingly upwardly mobile professionals — some are older, yes, they’ve made their wealth or they’re running their businesses or managing their property holdings — but increasingly the younger HSBC Premier customer is a professional and often an OFW. They are globally independent. They’re going to go on working abroad and probably come back home and settle later. They’re finding the Premier product absolutely perfect for them — they have credit card capability across the world, they can remit money back to their family, their family can come out to join them if they’re living or working overseas, and they can still keep their Philippine accounts, and they’ve got one point of contact with their Premier relationship manager.”
Many people think of OFWs as laborers but the OFW of today is going up-market — they’re doctors, engineers, architects, ship captains. “You can keep your money in gold bars or under your mattress — or you can build your wealth and invest it in bonds or property,” he adds with a laugh.
Logan’s observations are consistent with other studies on the future of wealth and the wealth of the future. Dr. Yuwa Hedrick-Wong, MasterCard economic adviser for Asia Pacific and author of the book Holding Up Half of the Sky: The Women Consumers of Asia, gives a country-by-country analysis of economic and demographic data. The book’s foreword summarizes the emerging trends on wealth: “The 21st century is the coming of age of Asia as an economic powerhouse. It is also the coming of age of Asian women as an economic force. The business reality in Asia is that women are the buyers and key decision makers in the purchase of most consumer goods. Increasingly, they are the economic equals of men in the workplace…A convergence of demographic and economic trends is shaping the consumer market — and it is no exaggeration to say that these new Asian women are ‘holding up half of the sky.’”
Logan, like many HSBC executives in the Philippines, has spent many years in Asia including stints in China, Vietnam, and Australia, before being posted to the Philippines. Both he and HSBC SVP and head of Marketing Christopher Rourke personify the bank’s seemingly simple but very profound slogan — “the world’s local bank” — or in their case, “the world’s local bankers” who speak both the global and the local banking languages, know the local customs, and strategize locally with an eye on the global market.
HSBC Premier MasterCard, according to Logan and Rourke, is an integral part of the whole HSBC Premier proposition, which takes care of the bank’s wealthy clients. “We don’t do just the card, we look after the customer. He gets a relationship manager who knows him by name so he doesn’t have to go through so many formalities. He gets to do his banking in the Premier Center — there are 23 located in 24 HSBC branches in the Philippines — and he is recognized as a Premier client in the 82 countries where HSBC Premier operates. You want someone to look after you, someone you trust and can contact anytime. The relationship manager will help the client in his banking and investment needs.”
Just who is the HSBC Premier MasterCard cardholder? Rourke says he or she is an upwardly mobile professional or investor that tends to do a lot of international traveling. “It’s very important that the card has higher limits for this type of customer, that it’s internationally accepted because that customer will do a lot of traveling. MasterCard was selected for these reasons. With HSBC Premier, it doesn’t matter whether you’re in Mexico or Kinshasa, anywhere you are it should be the same and you are recognized as being a member of the Premier family.”
You’re a VIP — and the Premier membership is your passport to special services and treatment. Services such as being able to easily manage multiple accounts in multiple currencies, special rewards for accrued points, and recognition in Premier Centers around the world. Think valet parking and coffee while doing your transactions in the lounge. No need to wait in line. Premier membership gives the client the capability to pay and transfer money online instantaneously around the world with no fees up to P100,000.
“You’re able to link up on one Internet page and see all your accounts in, say, Hong Kong, Singapore, and the Philippines. It’s part of looking after the total financial requirements of the customer. If you’re an upwardly mobile client, the last thing you want is a lot of hassles in your banking and investment needs.” While HSBC doesn’t do absolute personal financial advising, it makes investment opportunities available to clients.
So how do you get to be a Premier client? “There’s a number of entry criteria to HSBC Premier,” explains Logan. “Here in the Philippines it’s normally investments or savings that’s in the order of P4 million upwards.”
The bank looks at everything —not just what’s in your account — such as the bonds you’ve invested and long-term savings investments plans (designer bags, though an “investment” for most women, don’t qualify!).
Globally, there are 5.5 million HSBC Premier clients, although not all Premier clients start out as such. Logan says most are in their early thirties but many start appearing as HSBC clients in their late twenties, and then qualify for Premier membership later on. “What we do is build them in other segments before they become Premier,” Logan says. “It’s like you’re after your first property, then you get married and settle down. Your requirements are different, you won’t be doing a lot of traveling and living in five-star hotels yet. You have a different type of budget and priorities. You’re going to be focused on the early building of your future wealth and your foundation rather than managing your wealth. Then you grow into our Premier base.”
By the time they’re in their thirties or forties, the wanderlust kicks in and they can actually afford to travel on a whim several times a year. So the Premier MasterCard catalogue offers cardholders generous rewards, and with tie-ups with Asia Miles (the frequent flyer program of 20 airlines including Cathay Pacific, American Airlines, British Airways and Qantas Airways), and Kris Flyer (of Singapore Airlines), travel and upgrades can be free.
“The HSBC Rewards Program is one of the most generous in the industry (one reward point for every P5 spent; and 7 points for 1 air mile) and the catalogue is very competitive,” says Rourke. “For all types of cards we have the 5% discount on gas with Caltex — it’s a very portable ‘device’ that clients can use all the time. What sets Premier apart are the experiential rewards, like if you go to the US you can have a special dinner hosted by a chef using your rewards points. In the past we’ve also done things like special shopping sprees in Singapore. We keep it fresh all the time so customers have something new to see.”
“Premier clients are looking for quality of life, they want something to remember,” adds Logan. “They have experienced a lot already and now they’re looking for something different and very often it’s something to experience on a night out on the town. Premier customers are demanding, sophisticated, well-traveled, and we have to reflect that in the whole Premier brand.”
Rourke adds, “The advantage for us is that we offer a seamless transaction, and a high-quality and consistent service that you get in the Philippines or Mexico or Hong Kong. The top criteria are international flexibility and mobility. HSBC prides itself on its global presence and the Premier market is made up of customers who have family overseas, who do business and travel overseas, and we’re finding that there’s far, far more people like these today and will be in the future than there ever was before.”
Using the HSBC Premier MasterCard for travel tickets also gives the cardholder purchase protection in cases of lost luggage as well as travel insurance coverage. The Premier Centers can also facilitate emergency requirements if the card is lost and there are hotel bills or airline tickets to be paid.
The latest promos of HSBC have been so well received by the market and the women love it — otherwise, as Logan points out, the card would have stayed in the back of their purse and they will bring out another one. “That’s what competition is all about, why they’re choosing your card. It’s open, it’s honest, it’s transparent. If there’s a fee, we will tell you there is a fee, it won’t be something that will suddenly turn up in your statement. It’s really a very important competitive edge for us. In every country we have Premier, we mystery shop ourselves and talk to our clients.”
They do understand the Filipino market: “Expectations are quite high particularly when you have a brand like HSBC — you’re a big, global bank, we expect a certain standard and service, but equally I expect that same treatment when I go overseas,” says Logan.
HSBC is not the world’s local bank for nothing.