Banks expand wealth management beyond finance

Banks, traditionally focused on managing money, are now shifting their attention to life planning for high-net-worth clients to secure non-interest income. They are expanding their wealth management services beyond finance, offering a range of services from matchmaking for clients to providing information on college admissions for their children.

The shift comes as selling high-yield, high-risk financial products has become increasingly challenging for banks. Investors have suffered significant losses from equity-linked securities (ELS) tied to the Hong Kong stock market, exacerbated by deteriorating relations between the United States and China. In response, financial authorities are moving to strengthen regulations on the sale of ELS products to prevent similar incidents.

Against this backdrop, managing the assets of high-net-worth individuals has emerged as a key strategy for banks to generate revenues.

One of the most notable services is the matchmaking program.

Woori Bank recently signed a business agreement with the matchmaking consulting service Gayeon, through which the bank will offer this service to customers of its wealth management brand, Two Chairs Exclusive.

Based on the preferences and ideal partner criteria of applicants, the service uses dedicated managers and AI recommendations to provide matchmaking opportunities for a year, with the goal of marriage.

Hana Bank has been running a matchmaking program for children of high-net-worth clients for 20 years. In addition to one-on-one matchmaking, the bank hosts group matchmaking events once a year, inviting about 10 participants each time.

Through this program, 60 couples have met and married. For those who did not become couples, the program has also fostered communities where participants share hobbies or engage in investment study groups.

Banks are particularly focusing on creating a lock-in effect by targeting future clients through services like hosting college admissions seminars or offering business succession education for the children of high-net-worth clients. A lock-in effect occurs when customers become dependent on a specific good or service.

Since April, Shinhan Bank has been running the “next leaders program” for VIP clients and their children. Aimed at those born after 1984, the program includes lectures covering a range of topics such as business strategy, succession planning, taxation and leadership.

“Recently, wealth management has increasingly focused on families rather than individual clients,” an official at a major bank said.

“Services targeting the children of clients and younger wealthy individuals are gaining popularity as banks seek to secure future clients through these offerings.”

Additionally, banks are strengthening their existing offerings of cultural and sports events.

KB Kookmin Bank offers VIP clients a range of experiences, including concerts, golf events, and cooking classes.

Industry officials noted that interest in art has been increasing in recent years, driven by growing demand not only for art investments but also for accurate valuations for inheritance and donations.

This has promoted several banks to provide advisory services for purchasing and selling art, as well as artwork storage services.