UOB poised to benefit from growth of SEA's mass affluent segment

UOB has woven partnerships with privilege banking to appeal to the segment.

Singapore’s UOB is poised for growth with the rise of the mass affluent segment in Southeast Asia, thanks to its foothold in the market, reports data and analytics company GlobalData.

SEA’s mass affluent market grew by 36.4% between 2017 and 2022, and healthy growth is expected to continue.

ASEAN nations have notably been benefiting from foreign direct investment, increasing level of market development, and India’s economic growth. This is fueling heightened levels of consumption and trade for the nations within the region, said Phoebe Hodgson, associate banking and payments analyst at GlobalData.

Hodgson highlighted the Malaysian economy, which she said has been “rapidly developing” and is now the leading nation in Islamic finance.

Labor market reforms have also reportedly been effective in helping Malaysian workers cope with the rising cost of living. This, in turn, is creating a friendlier environment for wealth accumulation, she said.

These factors benefit UOB. The expansion of the middle class has allowed for strong competition from international players to impact the market. 

UOB has seen significant growth, becoming the fourth largest provider of current accounts in the mass affluent market in Malaysia, Hodgson said.

In 2023, UOB made up 10.3% of the Malaysian mass affluent savings account market share, up from its 2.6% share in the total market, according to data from GlobalData.

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Similar advantages exist for UOB in other key markets in the region. In Thailand, UOB now makes up 9.4% of the mass affluent credit card market share, especially after it picked up the market share from the acquisition of Citibank’s retail bank.

Hodgson noted that UOB’s privilege banking service– which features rewards and personalisation– has helped attract the mass affluent segment to become UOB customers.

Its partnership with e-commerce company Lazada across five ASEAN markets may be another important element in its appeal to the mass affluent, Hodgson said.

Additional partnerships with the likes of Singapore Airlines and Taylor Swift’s Era’s Tour have also helped UOB boost credit card customer acquisition.

“GlobalData’s report found that customers are willing to pay for additional financial offerings– including preferential deals on products and easier e-commerce experiences,” she noted.