THE RISE OF THE SOCIALLY MOBILE
HAVE you heard of the term “emerging affluent” (EA)? These are individuals who have enough money to spend, save and invest and their economic power has an impact on market growth.
The EA create their own prosperity, and achieve far more than their parents in their education, careers and businesses.
Standard Chartered has, to date, carried out four studies on this emerging consumer group as it believes they are a significant driver of market growth. These studies provide fresh insights into the social mobility of the EA in this region, and this is the first year Malaysia is part of the global study which examines the views of 11,000 EA consumers from 11 markets across Asia, Africa and the Middle East.
Titled Climbing The Prosperity Ladder, the Emerging Affluent study for 2018 has revealed how the Malaysian market and the Malaysian emerging affluent now have more control over their money thanks to digital technology, which has broadened their access to money management and helped to support their financial well-being.
Savings and investment habits
In today’s world, the EA are taking social mobility into their own hands, believing that it’s not how much money one earns, but what one does with it.
Malaysia has a 55% social mobility rate. This is strong considering that continual social movement is more challenging in mature markets, and the Malaysian economy is more developed than many of its emerging neighbours.
Investing in financial products is helping them to keep moving up the ladder, with 56% of those in the SC study saying this was a strategy for meeting their financial goals and increasing their wealth. By comparison, less than half or those surveyed said that their salary and career progression helped them to achieve this.
The EA believe that smart financial choices will improve their social status – more than two-thirds (69%) say that managing their finances effectively holds the key to greater social mobility.
They want to know more about money management and believe that a lack of financial understanding stops them for achieving further success.
This group of people knows what it wants to achieve with its money, and has identified clear goals to work towards.
For example, children’s education was ranked as the most important savings priority for the EA in every market in the study, and this was because education is essential for one to advnace in social mobility.
Among the EA, savings accounts are the most popular method of achieving wealth targets. This is followed by time deposits and then property investment, and real estate.
Hungry to improve their financial position, these people are eager for professional financial guidance. With access to sound financial advice, the EA would be able to make informed decisions with confidence, so that their money can work smarter and harder.
Growing appetite for technology
Online banking tools are key to effective financial management today. Payments and transfers, stock investments and financial advice are all available at one’s finger tips, and new technology allows for quick and easy money management anywhere in the world.
Financial technology – or fintech – is a most useful tool for the EA, with almost two-thirds saying that their familiarity with digital tools had been vital to their personal success.
After all, digital technology makes financial products more visible and accessible, allowing users to make more informed decisions quickly and easily. At least 65% of those studies, say that online banking makes them feel they have more control over their money and investments.
Basic financial tasks are increasingly taking place quickly and securely via smartphone devices and the EA have an appetite for managing their wealth more broadly online, even if there’s risk involved. They are comfortable going online for financial advice, with more than half saying they would invest in financial products online if an on-demand adviser was available.
More than three-quarters (78%) use their bank’s smartphone app to monitor their bank balance and make payments once a week or more.
Banking apps aren’t the only way the emerging affluent are using their smartphones to manage their money. Making payments through third-party platforms such as Alipay, PayPal or WeChat Pay is even more popular in certain markets.
From the study, it seems clear the EA are on an upward social trajectory and they’re hungry for financial tools and information, eager to embrace digital technology in order to achieve their dreams and ambitions. In the process, they are helping to fuel growth in some of the world’s most dynamic markets. And the future looks bright.