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Home » Opinion » Biz Commentary

Master account marketing with a bang to lure youth

Shanghai Daily's Biz Commentary section introduces a new series - Numbers of Things - which will churn out more interesting insights on what numerous data mean for readers eager to know what's happening in China's business circle.

In a culture where many people maintain multiple accounts at different banks, a Chinese joint-stock bank stirred up a storm when it launched a marketing campaign to entice customers to the idea of a single master account linked to all their other accounts.

The promotion suggested, as one example, putting a husband on a 1,000 yuan (US$159) monthly allowance and automatically directing any excess cash in his account to a master account controlled by his wife.

It was billed as a household financial management tool to help families save for things like home mortgages.

Needless to say, the idea sparked a stream of controversy.

One Weibo user posted a photo of the bank's advertising promo on the Internet, calling it an "atrocious" notion that would make married men weep. The post went viral to more than 180,000 netizens.

Women, apparently, were less outraged by the idea of stronger apron strings.

"I'd never heard about the service until I read it online," said Ruby Yuan, a white collar worker who signed up for the master account service. "It saves me a lot of trouble. Now I use only a single login to access all my bank accounts. And I can choose to link more accounts or unlink any whenever I want."

The joint-stock bank is heavily promoting the idea of linking parallel accounts in a central fund, even if that involves cross-bank transfers. A customer can pre-define minimum balances for each linked account.

So-called "cash concentration" is a common management service provided by banks to business customers who need to constantly transfer funds from a number of accounts to a central account, where money can be efficiently managed in short-term investments.

The function was first offered to retail customers in 2011 by banks that belong to the interbank online payment clearing system known as the "super online banking system." The system was developed by the People's Bank of China, the central bank, and launched first to corporate clients in 2010.

According to media reports, there were only 10,000 active users of the service last year in Shanghai, a city of 24 million people.

That leaves a lot of scope for expansion, prompting the joint-stock bank to re-launch marketing of the idea with a splash.

The younger generation, like Yuan, are the top retail customers for banks, which are anxious to retain their accounts while reducing internal costs. The income and spending power of this age group is expected to grow into the wealthiest consumption group in the country in the next two decades. By offering "cash concentration" services at no extra charge, the joint-stock bank is seeking to entrench the loyalty of young customers.

Retail banking

Advisory firm McKinsey predicted last year that China's retail banking industry would become the world's second-biggest by 2015, after the United States. The battle lines are drawn across a highly competitive field, forcing lenders to focus on convenient branch networks, genial tellers and multifaceted customer services. In today's retail banking, it's all about mobile, real-time, and customized services.

The concept of "one interface for all accounts" eliminates the need for customers to operate across different accounts at different banks. It provides a simple master account from which all other services can be linked.

The service also works as a remote deposit capture for a bank because funds are frequently channeled from other banks to the master account.

It also allows a bank to gain a sharper picture of a family's entire financial activities, opening the opportunity to offer more tailored services.

"It takes a few more seconds than usual when I make cross-bank account inquires in the master account," said Yuan.

"I think there's still room for system improvement. Although the user experience is not so perfect, I still signed up (with the joint-stock bank) because other banks showed no interest when I inquired about the new service. I don't think those banks value me as a customer."



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