Private Investment: A strategic imperative for Europe’s future 

Europe stands at a pivotal crossroads, propelled into an era of geopolitical volatility, economic fragmentation, and rising global risks. From the urgent drive to decarbonize and secure energy, to the race for technological and AI sovereignty, and the imperative to strengthen European defense, the continent faces its greatest financial and strategic challenges in a generation.

Meeting these systemic challenges requires massive, sustained funding – far beyond what public resources alone can provide. Across Europe, households hold an estimated €13.2 trillion in bank deposits, a vast pool of largely dormant capital representing an enormous untapped resource.

Mobilizing even a fraction of these private savings by channeling household wealth into productive capital market instruments is therefore both a strategic imperative and a moral obligation, essential to bridging the investment gap and securing Europe’s future prosperity.

As trusted financial intermediaries, banks sit at the heart of this vital mission: to steer private capital into productive assets that drive growth, sustainability, and resilience across Europe.

The €4 Trillion Question: Mass Affluent, underserved and underinvested

Zoom in, and the sharpest lever becomes clear: within the private capital landscape, Mass Affluent households—those holding between €50,000 and €1 million in investable assets—represent the largest and most promising reservoir of investable capital. Across Europe, 59 million households collectively hold around €4 trillion in investable assets. Yet, much of this sizeable wealth remains locked in low-return cash deposits, reflecting an underinvestment trend that gradually erodes value as inflation bites.

This inertia is a lose-lose-lose:

• Clients forfeit opportunities for long-term wealth creation.
• Banks miss out on growth and client loyalty.
• Europe limits its own ambitions for green, digital and resilient infrastructure.

The upside? Wake this sleeping giant, and everybody wins:

• Clients gain access to diversified, affordable investment products, enabling sustainable wealth growth and stronger financial security.
• Banks benefit from more resilient, recurring revenue streams and deeper client engagement.
• Europe's economy advances as fresh capital flows into strategic sectors, including green technology, digital innovation, and infrastructure modernization.

Traditionally, the Mass Affluent segment has been underserved, caught in a banking demand-supply gap—too wealthy for standard retail banking, yet below the typical thresholds of private banking. This service gap has constrained the deployment of their substantial savings into growth-oriented investments.
Change, however, is accelerating, driven by several intersecting forces:

• Bold EU policies are breaking down barriers and encouraging capital market participation (e.g., Savings and Investment Union and Retail Investment Strategy).
• Revolutionary digital platforms and ultra-low-cost ETFs have made robust investing simple, affordable and engaging
• Savvy investors, particularly younger generations, are ready: Mass Affluent clients are no longer content to remain on the sidelines.

Together, these factors signal a pivotal moment: Mass Affluent investors are poised to play a key role in driving the next wave of private investment within Europe, to the benefit of all stakeholders.

Reclaiming leadership in a disrupted marketplace

Given the strategic urgency of mobilizing private investments and the vast opportunity concentrated in the Mass Affluent segment, banks are at a crucial juncture.

While fintech firms and neobanks have been successful in attracting many Mass Affluent clients by delivering sleek digital experiences and democratized investing models, incumbent European banks—both retail and private—retain invaluable competitive assets:

• Trust: Most clients are not ready to move their full portfolios to new digital entrants, particularly when significant financial stakes are at play
• Client relationships: Banks already know these clients, maintain established relationships, and can cross-sell efficiently.
• Holistic solutions: Only incumbents provide full-stack services, including credit, lending, estate planning, and wealth services
• Strong brands: Longstanding reputations convey stability and trust, especially for major financial decisions.

But here’s the reality: sitting on these strengths is not a strategy. Banks are at risk of missing out on the opportunity represented by these capital flows unless they act quickly and decisively to rethink how they serve the Mass Affluent.

Incremental improvements alone will not meet the velocity and expectations of today’s Mass Affluent clients. Banks must boldly transform, which entails:

• Rethinking value propositions to address the distinct needs of different Mass Affluent subgroups.
• Adopting fully digital, yet human-augmented, hybrid engagement models that combine convenience with personalized support.
• Innovating products and pricing that deliver clear value and full transparency.
• Leveraging emerging technologies to streamline operations and scale services, serving more clients at lower incremental cost.
• Embedding financial education and community features to strengthen client trust and encourage participation.

This is a strategic inflection point: banks that act decisively will not only capture new client segments and assets but also reaffirm their central role in driving Europe’s economic renewal and the vitality of its capital markets.

From expectations to execution: Building your Mass Affluent proposition 

To succeed in this segment, banks must gain a deep understanding of Mass Affluent client needs and structure their approach around four core pillars, enabling scalable, impactful delivery:

Translating expectations into action: The pillars that really matter 

Winning the Mass Affluent race is not rocket science but requires bold moves, not marginal tinkering. Here is a playbook of critical building blocks for turning Mass Affluent expectations into high-impact, scalable solutions: 

1. Target smarter: Leverage behavioral analytics and key life events (e.g., promotions, new home purchases) to identify and segment high-potential subgroups such as young professionals, entrepreneurs, or digital natives. Move beyond generic bands to predictive, event-driven outreach.
2. Go hybrid: Build seamless digital journeys with instant access to human advice where it matters. Offer advisors on demand and deliver personalized content at scale.
3. Build products for the real world: Scrap legacy minimums. Provide ETFs and thematic portfolios with minimal thresholds, incorporating thematic overlays such as “Europe” or “Green,” and goal-driven modules through automated monthly investing. Make investing as easy as subscribing.
4. Reward transparency and loyalty: Replace opaque fees with clear, transparent fee schedules: all-in fees, subscription-based, or performance-linked pricing that incentivizes engagement and long-term loyalty.
5. Make clients smarter, not just richer: Deliver interactive, progressive education to enhance clients’ financial literacy and engagement. Include in-app on-demand learning, progressive learning tracks and simulators that encourage peer interaction and active participation.

A moment of strategic choice

Will European banks—both retail and private—lead the charge in mobilizing €4 trillion in Mass Affluent liquidity, or cede this foundational role to agile digital disruptors? The stakes are high. By acting decisively—combining trust, expertise, and innovative, client-centric solutions—banks can not only reinvigorate their profit pool but also cement their strategic relevance for decades, driving Europe’s transition toward a more prosperous, sustainable future.

Ultimately, by aligning their organizations around these pillars, any bank can turn aspiration into execution, delivering concrete impact for clients, shareholders, and society at large. Private banks, in particular, can harness their brand strength and advisory expertise to boldly enter and excel at scale in the Mass Affluent market through new digital, cost-effective models.

Now is the time to claim leadership in Europe’s next wave of capital markets, by designing banking that truly serves the ambitions of the Mass Affluent.