Young, well-earning and investment-savvy: The so-called “emerging affluents” are exactly the customer group that banks want – the next generation in private banking and therefore particularly lucrative. The most money will soon be earned in this segment, so institutes are watching closely how this target group is changing. On average, these customers are around 30 years old, have more than 3,000 euros in disposable net income per month and show hardly any differences between men and women when it comes to interest in the capital market.
The Boston Consulting Group (BCG) examined what these customers want. The result is clear: When it comes to securities, traditional banks are no longer relevant. What is even more remarkable, however, is that they are now losing importance when it comes to salary accounts. Although 37 percent of those surveyed currently still have their salary account at a branch bank, this proportion is shrinking rapidly. In 2023 it was still 49 percent.
The decline is even more pronounced when it comes to securities depots: only ten percent rely on traditional banks; in 2023 it was still 21 percent. The alternatives are direct banks like Dadat or neobanks like N26, Trade Republic and Revolut. But this is not about speculative investments. The majority invest regularly and pursue long-term goals such as financial independence.
The study shows how broadly the “emerging affluents” invest: 89 percent of those surveyed in Germany and Austria say they are invested in ETFs. Multiple entries were possible. 72 percent also have a savings account, whether tied or flexible. 36 percent invest in individual stocks, 34 percent in real estate, 32 percent in crypto.
The fact that traditional branch banks are losing so much market share, especially when it comes to salary accounts, is a historic turning point, says study author Achim Ruckensteiner in an interview with the “Presse”. The development is particularly sensitive from the banks’ perspective because the entire customer relationship is often lost in the long term with the current account. “If the salary account is gone, then the 15 logins per month are gone and with them the customer relationship will eventually be lost,” says Ruckensteiner.
According to BCG, the reasons for the success of neobrokers lie primarily in three points: price, user experience and offer. Neobrokers are simpler, cheaper and closer to the needs of customers. The user interfaces are intuitive and reduced to the essentials. Exactly what a digitally influenced target group expects. However, the deciding factor is still the price. “The customer group is very price-sensitive and doesn’t want to pay high fees without seeing the added value,” says Ruckensteiner. While traditional banks continue to charge comparatively high fees, trades with neobrokers are often possible for one euro or even free of charge. More than 60 percent said in the survey that they were very or somewhat likely to change provider if they got a good offer.
In addition, neobrokers have made access to the capital market much easier. Through models such as savings plans, which also enable the purchase of fractional shares, investors can invest even with small amounts. This significantly lowers the barrier to entry and ensures that many people start investing earlier. The third point is the offer: In addition to classic investments, the generation is more interested in crypto, raw materials, ETFs or private equity – areas in which many traditional banks still offer little. At the same time, the demand for traditional branch advice is falling significantly, even among wealthy people. Eleven percent already use AI regularly and 25 percent occasionally to analyze their own portfolio. More than 50 percent don’t do that – but are open to it. So the need for information is there. Customers then prefer to make decisions on their own.
And this is the point at which banks can catch up, because despite their success, neobrokers also have their limits. Many customers lack a more in-depth analysis. Banks must therefore make their knowledge digitally accessible and offer useful AI tools. “Banks should find a way to incorporate the bank’s investment expertise in such a way that the customer has added value. A few new features alone are not enough.”
