Wealth Management for Non-Resident Indians 2010

Introduction

Non-resident Indians are a lucrative customer segment, but private banks looking to attract and retain these individuals face a number of distinct challenges. To succeed in this market, banks need to understand the changing nature of these customers and the shifting competitive landscape, and have well-developed strategic plans.

Scope

*Interviews were conducted with bankers and managers servicing the NRI segment in Europe, Asia Pacific and the Middle East in June and July 2010.

*Most of these bankers worked for international private banks, although Datamonitor also spoke to one India-based bank targeting this segment.

Highlights

Because of their backgrounds, NRIs are well disposed towards investing in India and notably price sensitive, control hungry and return orientated. The crisis hasn’t materially altered the character of NRIs; it has, however, made them a little more risk averse and even more interested in investing in India.

There is intense competition among private banks for NRIs’ custom, both from international banks and increasingly from domestic banks in the Middle East and India. The Indian banks are doing particularly well in penetrating this segment and could materially alter the competitive landscape in future.

To successfully target this segment, international banks with a presence in India need to develop or source unique India-specific investment opportunities. Country-specific banks outside of India should look to use their extensive physical presence and local investment expertise to develop a USP.

Reasons to Purchase

*Understand the changing nature of affluent and HNW NRI customers around the world

*Find out how the competitive landscape is changing, with the rise of India-based banks

*Access Datamonitor's best ideas on how to succeed within this customer segment


Report Highlights

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Overview 1
Catalyst 1
Summary 1
Methodology 1
Executive Summary 3
NRIs are an attractive customer segment with a very distinctive and fast changing profile 3
Success in the NRI segment lies in finding smart answers to three strategic questions 3
Table of Contents 4
Table of figures 5
Table of tables 6
The Non-Resident Indian Customer 7
The Middle East is still the major host region for NRIs, but there are signs that they are increasingly looking in the direction of Asia 7
Defining characteristics: NRIs display many attributes typical of entrepreneurs, and retain strong links to India 10
Many NRIs are entrepreneurs; they are price sensitive and return oriented, and reluctant to give up control 10
NRIs retain strong cultural, financial, familial and emotional links to their homeland 11
The crisis has seen NRIs focus even more on India, and become a little more cautious 12
NRIs are even more keen to invest in India than they were in the past 12
NRIs are not quite so enthusiastic about risk as they used to be 14
Private banks need to focus on service quality, price and product if they are to attract NRIs 14
Banks need to be financially robust in order to do business with NRIs 14
NRIs are looking for fixed income opportunities and are interested in advisory asset management services 15
Fixed income products are in demand among NRIs, as are many other product categories 15
Advisory asset management services are in demand among NRIs 15
Wealth Management for Non-Resident Indian Customers 17
Competition for NRI business around the world is fierce, and the crisis has done nothing to change this 17
International private banks have continued to prioritize the NRI segment throughout the crisis 17
Key international players 18
Key Middle East-based players 19
Key India-based players 19
In order to successfully compete, banks need to have powerful USPs and be cunning in how they sell to and service this segment 21
There are a number of key questions that banks need to ask themselves 21
What is our USP in this segment? 21
What is our route to market within this segment? 21
How do we best service this segment? 21
How banks should answer these questions will depend very much on their nature 22
International banks with a presence in India 22
International banks with no presence in India 22
India-based banks 23
Country-specific banks (outside India) 23
Appendix 26
Methodology 26
Bibliography 26
Further reading 27
Ask the analyst 27
Datamonitor consulting 27
Disclaimer 27
List of Tables
Table 1: Countries with the largest numbers of NRIs across the world 10
Table 2: NRI remittances and compensation of employees, received (current $m), 2000-08 11
Table 3: NRI deposits outstanding ($m), 2000-10 13
Table 4: Wealth managers' strategies for targeting NRIs 25
List of Figures
Figure 1: Most NRIs have chosen to make the Middle East their home 8
Figure 2: Saudi Arabia is the single most popular country for NRIs 9
Figure 3: The level of NRI deposits within India has more than doubled over the last 10 years 13

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