Retail Banks Urged to Redefine Customer Value

Retail banks may be overlooking one of their biggest growth opportunities by continuing to define customer value primarily through current deposits and assets under management, rather than considering a customer’s future financial potential.

An analysis published by The Financial Brand argues that traditional affluent-banking models are becoming less effective because they tend to reward customers only after wealth has already accumulated. Instead, banks are being encouraged to identify customers whose incomes, business interests, borrowing patterns and financial complexity indicate that they could become significantly more valuable relationships over time.

The article identifies a clear shift in strategy: leading banks are increasingly investing in relationships before customers cross conventional wealth thresholds.

A professional entering peak earning years, an executive receiving more equity-based compensation or a business owner preparing for a future sale may currently hold fewer assets than a retired customer with an established investment portfolio. However, their future relationship value to the bank may be considerably higher.

Banks Need to Look Beyond Current Balances

Traditional segmentation models generally rely on measurable indicators such as deposits and investment balances. While useful, these metrics are backward-looking and may fail to capture future customer potential.

Banks already possess data that can provide useful indicators of future value, including:

• income growth;
• profession and career stage;
• borrowing behaviour;
• business ownership;
• commercial banking relationships;
• assets held with competing institutions; and
• anticipated liquidity events.

The article suggests that banks should increasingly measure future household value alongside existing balances and introduce advisory relationships before customers qualify for traditional affluent or private-banking programmes.

Bank of America Shows Value of Integrated Relationships

Bank of America is cited as an example of how integrating retail banking, lending and wealth management can deepen overall customer relationships.

At the end of 2024, Bank of America’s Global Wealth & Investment Management business had approximately $4.3 trillion in client balances. More than 60% of its wealth-management clients also maintained banking relationships with the group.

Another notable figure is that more than 72% of new Merrill wealth households added during 2024 entered with at least $500,000 in assets.

The figures illustrate the potential benefit of managing customers as complete financial relationships rather than treating deposits, loans and investments as independent product businesses.

Opportunity for Regional Banks

Regional banks may have a particular advantage because they often possess detailed knowledge of customers and local businesses.

A commercial banker may know when a business owner is preparing for a sale, while a lender may observe changing borrowing patterns and a wealth adviser may notice investment assets beginning to move.

The problem, according to the analysis, is that this information often remains fragmented across departments.

Connecting intelligence between retail banking, commercial banking, lending and wealth management could allow regional banks to identify emerging affluent customers earlier and compete more effectively with larger national institutions.

PNC and Huntington Engage Customers Earlier

PNC and Huntington are also cited as examples of institutions moving affluent-banking relationships earlier in the customer lifecycle.

PNC’s Premier Banking strategy provides dedicated relationship support and broader financial guidance while customers are still accumulating wealth rather than waiting until they have already reached private-banking thresholds.

Huntington has similarly sought to integrate banking, lending, trust and investment capabilities into a more coordinated customer experience.

The broader principle is that financial complexity can emerge well before a customer becomes conventionally wealthy.

Shift From Product Value to Lifetime Value

The emerging approach would require banks to rethink both segmentation and performance measurement.

Rather than focusing mainly on current balances or individual product profitability, banks could increasingly evaluate:

• household-level relationships;
• customer lifetime value;
• financial trajectory;
• relationship depth; and
• long-term growth potential.

The central argument is that retail banking growth may increasingly depend not on finding entirely new customers, but on recognising the future value of customers banks already serve.

Institutions that identify high-potential customers earlier, connect banking and wealth capabilities and build relationships while wealth is still being created could be better positioned to capture a larger share of those customers’ future financial activity.