ABN Amro currently offers two credit cards in Singapore, significantly fewer than the number offered by major issuers such as DBS and UOB. At present, ABN Amro targets 'mass affluent' customers with deposits over S$200,000. However, the company plans to expand its market presence by targeting those with annual incomes as low as S$20,000.
This comes as part of ABN Amro's strategy to boost its presence in Singapore's credit card market. The bank intends to grow its market share significantly, to rise from its current position with a 3% share of the market to becoming one of the country's top five card issuers by 2010.
In line with these objectives, ABN Amro will introduce a new credit card during Q1 2007 to tap into 'unexploited niches,' and will be looking to add up to 500,000 customers to its cardholder base.
The bank's ambitions to increase its market share could be considered too optimistic. Singapore's credit card market is one of the most saturated in the world, with the average adult carrying three or four credit cards. In addition, even with the launch of the new card, the bank will only be offering three credit cards, which is significantly less than major competitors such as DBS and UOB, which each offer around 15 cards.
Furthermore, although ABN Amro intends to target untapped niche markets, Singapore's card market is already very niche-oriented, with gender-specific cards, many co-branded cards to target different interests and affinity cards for most professions and interests already available. Therefore, ABN Amro might find itself fighting a losing battle to target new niche markets as other issuers have already cornered the market.
There is still hope for the bank, however. For example, rather than targeting existing cardholders, ABN Amro could target younger Singaporeans, such as those about to turn 21 - the minimum age for a credit card, and aim to hold onto these consumers for life. This would prove profitable for both ABN Amro's card portfolio and its other business units.