We talk to Monument, a “challenger” bank or “neobank” that has targeted a mass-affluent segment which it says is inadequately served by traditional lenders in the UK.
The
recent move by Coutts to raise its minimum
wealth threshold has prompted a new UK bank that focuses on
mass-affluent clients to highlight a significant market
gap.
Ian Rand (pictured below), CEO of UK-based Monument, which aims to cater
for the mass-affluent segment, says the kind of decision
that Coutts has taken vindicates the need for newer business
models. The term “mass-affluent” typically refers to those with
investable wealth from $250,000 to $1 million.
Ian Rand
“You see what is happening to the mass affluent segment – a group
that has got money and got better products and services in every
area of their lives. And yet this is not so for financial
services,” he told WealthBriefing in an interview. Rand
said the UK’s mass-affluent segment is worth about £9 trillion
($12.14 trillion).
“There is more wealth in the mass-affluent segment than in
ultra-high net worth and retail together…it is huge.
Unfortunately, big banks realised they could make money from it
by not serving it very well,” Rand said.
In the past, it was easy for banks to earn a return by enabling
clients to keep “lazy balances” of cash on deposit, he said.
“People are frustrated and they are going looking.”
Coutts, owned by NatWest Group, has
raised the minimum wealth threshold on new clients to £3 million
($4.05 million) from £1 million. Clients who would otherwise have
considered opening an account with the UK bank – which is reputed
to have the British monarch as its client – will no longer be
able to do so if they are under the £3 million mark, although
this news service understands that there is some flexibility
around it. The change was first published back in November
2025.
What is needed is for financial firms to offer more to such
clients, using modern technology tools to move clients’ deposits
to where they can earn the highest returns, Monument’s Rand said.
(He referred to his firm’s work in developing what are called
“sweep accounts”). Monument has just under 100,000 clients in the
UK. When the bank started out, the team expected that clients
would on average have about £28,000 on deposit, each, but in fact
it is closer to £60,000. (The minimum is £25,000).
Partnering with Firenze, a specialist, the firm has developed
a Lombard
lending offering where the interest rates and ratios are
competitive with more conventional Lombard offerings, he
said. Getting its Financial Conduct Authority clearance in
November 2021, Monument has launched a range of services since
then.
Segment strains
In an October 2023 report, Citi Ventures, the
venture capital arm of Citigroup, said that even the lower
reaches of the high net worth market (“millionaires next door”)
are underserved, given that rising cost pressures are prompting
banks to raise their minimums. (See an analysis
here.)
If the financial market has a binary option of retail (highly
digital, affordable and plain vanilla) at one end, and private
banking (complex offerings, bespoke investments, concierge
services, lots of in-person RM contact, structuring advice, etc)
on the other, this means that a person on their way up the wealth
scale faces a sudden jump from one level to a different one.
There is no “in-between.” This is a jarring experience when
onboarding, different scrutiny and complete changes in offerings
are involved.
Getting the mass-affluent market right is potentially lucrative:
“With nearly $27 trillion in assets – almost 32 per cent of total
HNWI wealth – and a large and increasing population base, the
affluent segment dominates a sizeable chunk of the wealth
pyramid,” Capgemini said in its World Wealth Report for
2023.
The consultancy even came up with the idea of
“wealth-as-a-service” (WaaS) to explain how the mass-affluent
market can be served.
There are options. UBS launched wealth management services in
October 2022 for affluent wealth band clients in China via its
WE.UBS digital platform, for example. Canada’s Wellington-Altus,
which this new service has interviewed about its business model,
says 80 per cent of its market is mass-affluent.
One Geneva-based private bank, for example, told this publication
that it had shut its doors to such clients, sadly, because they
weren’t profitable. Rising regulations and technology costs mean
that the minimums of investable assets keep rising. Even the $1
million minimum that Capgemini still uses (it has used it for
over 20 years) to define “high net worth” looks seriously out of
date, given the ravages of inflation.