Bank for the demanding

Private banking springs associations with a lush Swiss bank and super-rich customers. Is that perception wrong, and what are the advantages of the private banking offer of Millennium Prestige? Probably this stereotype is common, but in fact when we use the private banking phrase we are thinking about affluent customers. We serve of course customers requiring private banking services, but taking into account the growing potential among affluent clients, we shape our offer for this segment as well. What it has in common with private banking is primarily the profile and potential of the customer. We hope that one day our affluent customers will take advantage of a full range of private banking services. At present, we prefer to talk about product range, service models and networks, for affluent customers. How do you define your potential customer and how large is the market of potential Millennium Prestige customers? Since we are talking about banking services, we can say that the Millennium Prestige offer is targeted at customers whose revenues, in terms of inflows to their PRESTIGE account, exceed zł.12,000 a month, or whose accumulated assets exceed zł.100,000. Banks on the domestic market use criteria ranging from zł.200,000 to as much as zł.500,000 in accumulated assets. As for the size of the market, there is no effective way to estimate it precisely. One way could be to look at the number of taxpayers falling into the highest income tax bracket. That would give us the size of the market as about 300,000 individuals. That, however, leaves out many potential customers who have accumulated substantial assets in the past but do not pay high income taxes at present. Hence it is difficult to say how large the market is. What are the origins of this type of banking service within the Millennium Group? We operated traditionally as BIG, and then BIG Bank Gdański, the retail customer segment as one group. Towards the end of the 1990s, after an analysis of customer needs, we came to the conclusion that, depending on the size of revenues and assets, the size sub-segment of an individual customer requires a different service model. That is why we decided to build a service model for this segment. As a part of this, we opened 17 Millennium Prestige branches, which differ from other Millennium branches not just in terms of location, but also in terms of the type and standard of customer service. Branches are located in 15 major cities across the country. In addition to typical banking services, they offer an integrated product range, including investment products. The customer has the opportunity to gain exposure to capital markets, both directly and through investment funds. The offer also includes products to invest on foreign exchange markets. We combine the functions of a bank with asset management and investment fund services. What are the benefits of this customer service model? Millennium Prestige operates on a 'one-stop-shop' model. In co-operation with other companies of the Millennium Group, that is the brokerage house and investment funds, we offer a wide and constantly expanding range of products and services. Not only can customers purchase any products that they may require, but they are also offered added value in the form of an individual advisor. The first job of the advisor is to learn the customers' needs and requirements. An important, if not to say crucial, part of this job is to determine with the customer their investment goals and investment horizon and, most importantly, to analyse the customers' risk profile. This knowledge will allow us to define the customer's product portfolio. It is the advisor's job to find out these requirements and then suggest the proper portfolio of banking and investment products. In banking, everything begins with the customer. What types of investment instruments are on offer at Millennium Prestige branches? The basis of successful purchases in a Millennium Prestige branch is proper customer needs recognition. We offer all the instrument types currently available on the market, that is deposits, asset management services, investment funds and structured products. The last category, for example, covers deposits with return linked to various market indices on the Polish and Foreign money and capital markets. As for investment funds, we offer both złoty and dollar funds, investing in money and capital markets with a varying degree of exposure to different kinds of risk. We have in our offer all investment fund types that are currently available on the market. As soon as the law allows, we will also offer foreign funds. Currently, however, they seem to be unattractive to customers from a tax point of view. But I expect that soon a vehicle of the fund of funds (FoF) type will allow our customers to gain exposure to foreign funds. We also see a potential market for funds investing in foreign funds operating not just on capital markets, but in commodities or real estate as well. At the moment we do not yet offer to our customers the opportunity to invest in alternative asset classes, such as artworks or commodities. We find these markets not yet mature enough. That is to say sufficient levels of liquidity and security of investment in those asset classes has not yet been reached. If, however, a customer is interested in that type of investment, we can support them with our credit offer for affluent customers. Millennium Prestige provides full support in this respect. The customer can take loans to invest on the capital markets, but also in alternative asset classes, such as art works, metals, luxury goods or real estate. The last investment, that is in real estate, has been particularly popular in recent months - on the eve of European Union accession. What makes the Mille-nnium Prestige offer different from other products currently available on the market? Millennium Prestige customers can be served at the branch dedicated for this customer, but they can also make appointments with their advisors outside the branch at their convenience. Customers can use a generally available bank call center or place orders by phone directly with the branch. The bank is available for customers via the Internet as well, 24 hours a day. This service model is one way in which we differ from our competitors. Many of them do not enable the customer to call the branch to place orders, and not all make the advisor available outside the branch. That is an important difference, making, in our opinion, an important difference in convenience for the customer. That is particularly advantageous to our customers, as they have such convenient access to our 'one-stop-shop' type of service. Another point is our free banking model. A customer with assets higher than zł.200,000 pays no charges at all and only takes external costs. The client with less assets pays zł.45 a month for the individual service and otherwise can also take advantage of the free banking model. What are your plans for the future when it comes to developing and expanding your product range? That is one more way in which we would like to differentiate our offer. We will soon offer our customers a mixed product, incorporating both banking and insurance elements. This gives the customer increased transparency and greater convenience. Customers can consult all their financial needs with just one person, their personal advisor at Millennium PRESTIGE. We see the market evolution from the current model of 'invest for me,' to a customer demand driven concept of 'invest with me.' That means they recognise my needs, provide me with proper products, be transparent - provide regular information on my asset performance - and all this at a high quality of service. We believe the future is all about high-quality financial advisory services, and Millennium PRESTIGE is well placed to meet growing customer expectations. What is specific about this segment of the retail banking market? Banking for affluent customers must offer a product range with the best products available on the market. That means probably opening up the product platform. We are planning to move into this direction in the near future. In co-operation with our partner Millennium BPC, we will offer the best available products possible to offer in our domestic, legal and operational infrastructure. When it comes to structured products, we have begun co-operation already, and I hope that soon enough we will be able to offer interesting forex products. More than in other segments, the affluent and more private banking market is relationship banking. If the advisor recognises the customer's requirements properly and helps the customer to build adequately to the product portfolio, then the customer will be satisfied and willing to build up a portfolio constantly with the advisor. We need to remember as well that it is also a characteristic of this market segment that customers keep their money in more than one bank. That makes the job more challenging. For a great number of customers, an important point is investment value protection. At boom times, customers easily forget about protecting their asset value. We are now at this stage of growth, but customers still remember the recent bust, and so they remember about protecting their values. Finally, how would you define the profile of your potential customer? Generally speaking, this is an offer for customers who are busy with their own lives, both private and professional, and do not have or want to devote time to fighting their way through the jungle of various products and decide on their own how to invest. In this field, we want to offer our advisor to help in understanding the risk profile, time horizon and goal of investment and building proper product portfolios.