Mass affluent customers are an enormous opportunity for retail banks

Mass affluent consumers are a large demographic for banks to capture and monetize. There are 613 million mass affluent individuals (often defined as consumers with $100,000 to $1 million in liquid assets) worldwide, boasting combined assets of $177.2 trillion, and representing 39.4% of global wealth, per UBS. By contrast, the world’s 3.10 billion mass market consumers hold just 13.1% of overall wealth.

The mass affluent market is poised for sustainable growth. Over the course of the ongoing Great Wealth Transfer, older generations will pass $74.313 trillion to heirs globally, per UBS. And there are few brakes on mass affluent population growth in the long term: UBS notes that wealth mobility has increased even in the face of economic recessions. It estimates that 37.7% of the global population could graduate from the mass affluent to the high-net-worth-individual (HNWI) wealth bracket ($1 million to $3.5 million in liquid assets) between the years 2000 and 2030.

Mass affluent consumers are young and just beginning their wealth journeys, offering banks a long runway for cross- and upselling. Transfers from baby boomers will account for 63% of the total amount of money moved in the Great Wealth Transfer, making their millennial children the biggest beneficiaries of this event, per 2022 Cerulli Associates estimates (the latest available data). That means the mass affluent market will skew young: 40% of the US mass affluent population is under age 55, versus 23% of HNWIs and 16% of ultra HNWIs (over $3.5 million in liquid assets), per February 2024 Capco data.

Their spending power can drive revenues for banks. Young affluent US consumers’ average annual discretionary funds stand at $173,000, versus $55,000 for their young non-affluent peers, per 2022 Equifax data (the latest available data). And because they spend a higher share of their income on nonessentials, per a January 2024 PYMNTS.com survey, they can drive card, fee, and interest revenues from loan products for banks at a time when mass-market consumers are reining in spending.

Read the full report, Mass Affluent Consumer Banking.