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Foreign banks are battling it out to attract customers from the rapidly growing pool of affluent Indonesians.

Foo Mee Har, Standard Chartered’s global head of premium banking, said her bank had switched its focus to the Asian wealth-management market as it is growing twice as fast as in the West.

“The priority banking segment is a special segment in Asia as financial needs for the segment previously had limited attention. Indonesia is our main market as the economic recovery is ongoing,” she said on Wednesday.

That sentiment was echoed by Rajan Raju, head of consumer banking at Singapore’s DBS Bank. He told the Jakarta Globe last week that the challenge for banks was to convince wealthy Indonesians to abandon their conservative investment outlook.

Raju said that although most Indonesians are still putting their money in short-term time deposits, some had began to diversify their assets into insurance products that provide security and longer-term investment products that may offer higher returns.

“People’s attitudes are beginning to shift as they start to have a better understanding about financial planning. That is why we think the business will do very well here. The challenge is to educate the people and speed up the shift,” Raju said.

The number of affluent private investors in Indonesia is swelling by 7 percent every year, the third-fastest growth rate in the region after China and India, according to Standard Chartered Bank.

More than 300,000 Indonesians now hold assets worth more than $100,000, said Lani Darmawan, Standard Chartered’s country head of consumer banking. Given the quickening pace of economic growth, that number is expected to rise to 400,000 by 2012.

Although wealthy Indonesians have traditionally sought advice from bankers in Singapore, private banks such as Credit Suisse and Julius Baer are expanding in Indonesia as political stability and economic growth persuade the rich to keep more money at home.

Bank Indonesia figures show that at the end of November, the total amount of money in time deposits with one-month maturity was Rp 564 trillion ($60.3 billion), with a total of Rp 878 trillion in all time deposit accounts. Only Rp 85 trillion was kept in time deposits that have a maturity of one year or more.

The growth of private banking in Indonesia may pose something of a challenge for wealth managers in Singapore, where Merrill Lynch and Capgemini have estimated that Indonesians held more than $90 billion in assets in 2006.

At a time when private banks are shifting their focus to faster-growing markets in Asia, Indonesia’s richest people are accumulating wealth more rapidly than anywhere in the region outside China. The assets of Asian millionaires will exceed those of their North American counterparts by 2013, according to the annual global wealth survey by Merrill Lynch and Capgemini.

Meanwhile, the Indonesian economy may double in the next six years as the world’s biggest exporter of power-station coal and the largest producer of palm oil taps surging demand from India and China, according to a July report from CLSA Asia-Pacific Markets, which said Indonesia, China and India are Asia’s “next growth triangle.”