Banks see gold in silver economy; more launching dedicated schemes

Singapore

BANKS are finding gold in Singapore's silver economy as they help the ageing population plan for their lifestyle, wealth and health needs.

Following recent moves by OCBC and Standard Chartered Bank, Maybank is the latest to woo seniors, but the Malaysian bank has gone one step further: it has set the eligibility age at 50 - five years earlier than that at the other two banks.

Adam Tan, head of branch distribution at Maybank explained the reasons for the lower eligible age: "Retirement planning should be done as early as one starts working... For those who have already hit 50, our programme helps them relook at their portfolio and offers our services to grow and protect their wealth, as well as insure them."

He noted that there are 1.4 million Singapore residents aged at least 50 years old, and many are not doing enough to protect their savings against inflation.

Statistics shows that one in four Singaporeans will be aged 65 years and older by 2030, up from one in eight now.

The bank's programme, Passion Plus, was launched in May and offers an integrated package of banking products with preferential savings rates and lifestyle perks.

Its Privilege Plus Savings account, launched in 2010 for customers who are at least 50 years old and provide preferential rates and complimentary personal accident insurance coverage, is the key savings product underpinning the Passion Plus programme, along with endowment plans, retirement plans, structured deposits and unit trusts offered.

Among these three banks, Stanchart was the first to roll out such a programme in 2017. Known as MyWay, it is anchored by a step-up savings account with interest rates of up to 1.28 per cent.

Further, it offers access to income generating wealth solutions and privileges at selected travel and health merchants.

"The response to our bank's MyWay programme has been very positive and the number of clients grew by 49 per cent last year. One in five of our retail clients are aged 55 and above, with 44 per cent in the 55-65 years range. Approximately 95 per cent of them are affluent priority banking clients," the Stanchart spokesman told The Business Times.

The most popular benefits offered by the programme are the "heavily discounted" executive health screening and medical concierge. Customers' feedback also shows that digital learning, legacy planning, travel, and health and wellness top their interest lists.

OCBC Bank told BT that customers from the 55-65 age bracket form the largest group under its Silver Years programme launched last year.

There is an ongoing promotion in June where customers will get S$108 cash credited into their accounts if they deposit at least S$10,000 fresh funds into OCBC passbook savings account and statement savings account.

An additional S$55 will be credited into a senior's account if the deposited amount is at least S$50,000 in fresh funds.

Dennis Tan, head of consumer financial services Singapore at OCBC said: "While most conversations with seniors are about retirement planning, which is centred on the allocation of savings in order to achieve financial independence upon retirement, we recognise that there is a need to prioritise wealth solutions that protect and grow their retirement funds that have accumulated over the years while minimising investments risks in order to maintain their desired retirement lifestyles. "

Tin Min Ying, research analyst at Phillip Securities Research, told BT that before the millennials inherit or create their own wealth, the older generation holds the majority of the wealth right now and will remain the wealthiest until the "future-affluent" generation takes the lead in the next few decades.

"Helping them engage better with the changing banking landscape will enhance profitability and growth for banks. Hence banks are aware of the need to cater to the older generation by launching various promotions and activities to engage the old," she said.

"Wealth management is another aspect of banking that correlates to the ageing population. As we age, we need to save for retirement and health expenses. Hence AUMs (Assets under management) of the banks should expand in tandem as well."

Krishna Guha, equity analyst at Jefferies, said the financial planning services from the banks are helpful. "Financial institutions have identified products that do not disrupt retirement plans of individuals."

Other financial institutions may not have such integrated programmes but some do offer preferential deposit rates for senior customers.

One example is DBS' premier income account. Diane Chang, senior vice-president of the bank's deposits and secured lending told BT that for account-holders aged 55 and above, they would enjoy 0.1 per cent per annum interest above DBS' prevailing board rates for Singapore fixed deposits from S$10,000 to S$999,999 for tenors of six to 60 months.

READ MORE: Big 3 banks can defend market share against fintech threats: Moody's