Targeting NRIs in Wealth Management

A Datamonitor report Targeting NRIs in Wealth Management A ready-made global wealth management customer segment Published: Apr-06 Product Code: Providing you with: Analysis on the growing trend among financial institutions in targeting these individuals with wealth management products and services Datamonitor s Global Expatriate Study that sizes the Indian population by country of domicile and provides a breakdown of wealth level Use this report to... Analysis of competitive dynamics in the NRI space across the globe View an indispensable guide to those looking to target non-resident Indians (NRIs) anywhere in the world www.datamonitor.com/financial

Introduction Targeting NRIs in Wealth Management is Datamonitor's latest insight report on what is emerging as a ready-made wealth management segment globally. Building on the resources and expertise of Datamonitor's Global Wealth Service team, the report is rich in data and analysis, and provides in-depth and impartial market assessment, and competitor intelligence. Datamonitor's Targeting NRIs in Wealth Management focuses on non-resident Indians (NRIs) around the Asia-Pacific region and globally. The report looks at the growing trend among financial institutions in targeting these individuals with wealth management products and services. The report provides access to Datamonitor's Global Expatriate Study, which sizes the Indian population by country of domicile and provides a breakdown of wealth level. The report analyses competitive dynamics in the NRI space across the globe and looks at future opportunities for targeted services. Key findings and highlights The largest NRI populations of the countries studied in the AP region are in Singapore and Australia, with 114,400 and 122,200 respectively. Australia is essentially a country of immigrants and it is therefore not surprising that it is home to large numbers of many different nationalities. The concern over understanding tax implications associated with property investment was considered very or fairly important by an average of 77% of expatriate respondents across the UK, the UAE, Hong Kong and Singapore. Respondents in the UK and the UAE found it of most concern with 80% stating it was very or fairly important. Like any potential wealth management client segment, NRIs have the potential to be demanding. They have with complex and differentiated needs related to the fact that they are outside of their country of origin. These complex needs present wealth managers with opportunities to target them with specific services. Reasons to buy This report is an indispensable guide to those looking to target non-resident Indians (NRIs) anywhere in the world With clear exposition of market opportunities and threats, the report is an effective aid for all parties in planning competitive strategy Find out how large the NRI population is globally and its breakdown by wealth level Contact us... From Europe: tel: +44 20 7675 7366 fax: +44 20 7675 7016 email: fsinfo@datamonitor.com From Germany: tel: +49 69 9750 3119 fax: +49 69 9750 3320 email: deinfo@datamonitor.com From the US: tel: +1 212 686 7400 fax: +1 212 686 2626 email: usinfo@datamonitor.com From Asia Pacific: tel: +61 2 8705 6900 fax: +61 2 8705 6901 email: apinfo@datamonitor.com

www.datamonitor.com/financial Sample pages from the report Market opportunity Figure 1: NRI deposits have been growing in value rapidly in recent years and were worth almost USD33bn as at March 2005 Value of deposits in accounts, USDm 25,000 20,000 15,000 10,000 5,000 0 1999 2000 2001 2002 2003 2004 2005 Market opportunity FCNR (B) NR (E) RA NR (NR) RD Source: Datamonitor, Reserve Bank of India D A T A M O N I T O R Lastly respondents were asked which insurance lines they thought were most important as expatriates from the following; motor, private health, life, home or household and travel. This remittance market is a very lucrative one and one that is growing rapidly. According to a report prepared by India's Department of Economic In general Analysis insurance and products were considered to be much less important than Policy, NRI remittances stood at USD15bn in the 2002-03 financial year. investment products and services or advisory and planning services. Perhaps because of differing healthcare systems in the four countries, private health insurance This is confirmed by the Reserve Bank of India (RBI), which produces statistics was considered to be the most important insurance product for an offshore bank to suggesting that remittances from overseas Indians have risen from approximately offer. Private health insurance was considered to be very or fairly important for an USD2bn in 1991. Despite the NRI population only having risen slightly since 1991, in average of 58% of respondents across the four countries, followed by life insurance, the financial year 2003-04 remittances amounted to USD23bn, almost 5% of GDP. which was considered very or fairly important by an average of 56% of respondents. Datamonitor s Global Expatriate Study provides further indication of the value that Of least importance to respondent were motor insurance and home and household expatriates place in money remittance services. The study involved a survey of 800 insurance, with 36% and 46% of respondents considering them very or fairly expatriates in four countries Hong Kong, Singapore, the UAE and the UK which important respectively. asked about the importance of various financial services products. The study Competitive dynamics revealed that across these four countries the respondents from the UK valued money transmission (remittance) services the least, with 83% saying they were very or fairly valuable. The proportions of individuals in Hong Kong, Singapore and Figure the 9: UAE that Expatriates were less interested in insurance products. Private found money transmission services very or fairly valuable were 92%, 90% and 93%. health insurance was considered the most important The largest for an 10 Indian banks by assets are: State Bank of India (SBI), Bank of India, offshore bank to provide ICICI, Punjab National Bank, Canara Bank, Bank of Baroda, Central Bank of India, Uco Bank, Union Bank of India and Syndicate Bank. All of these offer NRI services How important is it for an offshore bank to offer these Insurance and products? in total more than 80 Indian banks offer NRI services. Targeting NRIs Datamonitor (Published 04/2006) Page 100% 13 This report is a licensed product and is not to be photocopied 90% 80% Average percentage of respondents across the four countries 70% 60% 50% 40% 30% 20% 10% 0% Products and services include deposits, remittance, home loans, portfolio 13 15 21 15 26 management, investment consulting, tax advisory, insurance products and foreign currency loans. 23 36 31 35 32 40 Figure 18: A selection of the domestic Indian banks offering NRI services 34 33 29 26 23 16 14 15 19 Motor Travel Life Private Home or health household Source: Datamonitor s Global Expatriate Study D A T A M O N I T O R Targeting NRIs Datamonitor (Published 04/2006) Page 21 This report is a licensed product and is not to be photocopied Source: Datamonitor, various bank websites D A T A M O N I T O R Partnerships between foreign and Indian firms If an existing customer base does not yield a large enough proportion of NRIs, or an institution lacks the resources to properly service the segment, then the obvious option is to partner with an Indian bank that can plug service gaps. Lloyds TSB and ICICI spotted an opportunity in the UK market UK-based bank Lloyds TSB is one bank outside of India that has recognized the potential of its NRI client base and seized the opportunity to grow its business in partnership with ICICI. Targeting NRIs Datamonitor (Published 04/2006) Page 35 This report is a licensed product and is not to be photocopied Request more sample pages...for FREE! From Europe: tel: +44 20 7675 7366 fax: +44 20 7675 7016 email: fsinfo@datamonitor.com From Germany: tel: +49 69 9750 3119 fax: +49 69 9750 3320 email: deinfo@datamonitor.com From the US: tel: +1 212 686 7400 fax: +1 212 686 2626 email: usinfo@datamonitor.com From Asia Pacific: tel: +61 2 8705 6900 fax: +61 2 8705 6901 email: apinfo@datamonitor.com

Table of contents INTRODUCTION What is this report about? Who is the target reader? THE MARKET OPPORTUNITY - A brief history of Indian migration There are three key reasons why financial instiitutions should consider targeting the NRI population - They have differentiated needs - NRI populations around the globe are large - There are significant proportions of wealthy individuals among their number COMPETITIVE DYNAMICS There are four ways in which financial institutions are targeting NRIs around the globe - Leveraging existing customer bases - Partnerships between foreign and Indian firms - Targeted wealth management products and services - Sponsorship and promotion APPENDIX TABLES Table 1: Value of NRI deposits by type, 1999-2005 Table 2: Foreign direct investment into India by country, 2002-2005 Table 3: Stocks and flows of NRIs into countries around the world, 2005 Table 4: Proportion of NRI populations that are affluent, 2005 Table 5: Wealth markets that have been modeled using the Global Wealth Model FIGURES Figure 1: NRI deposits have been growing in value rapidly in recent years and were worth almost USD33bn as at March 2005 Figure 2: Money transmission is clearly an important service offering for expatriates around the world Figure 3: Foreign investment flows into India have increased markedly since 2004, with Mauritius being the largest contributor Figure 4: Investment advisory services offered by an offshore bank are considered important Figure 5: Understanding of income tax position is a large concern for expatriates Figure 6: The tax or legal implications of buying property abroad are of concern to expatriates Figure 7: In general all investment services were deemed to be useful, but portfolio management, property investment and collective investments were the most popular Figure 8: Tax planning and advice were considered the most important advisory and planning services that an offshore bank could provide to expatriates Figure 9: Expatriates were less interested in insurance products. Private health insurance was considered the most important for an offshore bank to provide Figure 10: Of the 20 countries studied by Datamonitor, the Middle Eastern countries were home to the largest number of NRIs Figure 11: The UAE and Saudi Arabia are home to 2.6 million NRIs between them, with many more arriving each year Figure 12: The US is home to one of the world's largest Indian populations, and saw more than 70,000 arrive in 2005 Figure 13: Europe - and in particular the UK - is home to a large number of NRIs, with more than 30,000 arriving each year Figure 14: The Indian born population around Asia-Pacific is substantial, although many have been outside of India too long to be considered NRIs Figure 15: British Asians are more likely to be selfemployed than any other UK ethnic group Figure 16: Large proportions of the NRI populations in each country are either mass affluent of high net worth Figure 17: The proportion of NRIs that are considered affluent compared to the domestic population is particularly favorable in Thailand, Singapore, Indonesia, China and Ireland. Figure 18: A selection of the domestic Indian banks offering NRI services...the largest NRI populations of the countries studied in the AP region are in Singapore and Australia, with 114,400 and 122,200 respectively.... Alan Shields

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Interested in this topic? Wealth Management in Asia-Pacific a dynamic financial services sector in a changing market. In 2006, the uncertainties that typified the beginning of the century are a distant memory; wealth managers around the region are in highgrowth phase and looking to emerging markets for continued success. The road ahead is full of obstacles for every player looking to compete successfully in Asia- Pacific and Datamonitor s Asia-Pacific Wealth Management SPP with its mix of insight, market leading models, forecasts and strategic market analysis is a must-have guide for any player. Other reports available in this series Private Client Services in Singapore 2005 This report analyses the provision of private client services in Singapore. The report looks at Private Banking, Private Wealth Management and Private Client Stockbroking. Published: Sep-05 Product code: DMFS1811 Private Client Services in Hong Kong 2005 This report analyses the provision of private client services in Hong Kong. The report looks at Private Banking, Private Wealth Management, and Private Client Stockbroking. Published: Sep-05 Product code: DMFS1812 Private Client Services in Australia 2005 This report analyzes the provision of private client services in Australia. The report looks at Private Banking, Private Wealth Management, Premier Banking and Private Client Stockbroking. Published: Aug-05 Product code:dmfs1810 Innovation and Differentiation in Wealth Management - Asia Pacific This report analyzes innovation and differentiation globally in the areas of distribution, marketing, service and product design. Examples of innovation are examined in the form of case studies and their applicability to Asia Pacific is analyzed. Published: Jun-05 Product code: DMFS1771 Best Practice in Wealth Management - Asia Pacific This report reveals "Why wealth managers need to strive towards best practice?" and "What are the measures of best practice?" It then analyzes best practice from three perspectives; customer orientation, expansion and use of service channel. Published: May-05 Product code: DMFS1773 For more information about our products visit www.datamonitor.com/financial Subscribe to Monitor A monthly update of Datamonitor's new financial services products, delivered to you by email. Email: monitor@datamonitor.com

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