There are two key elements to the process of market segmentation: the criteria and the method applied in dividing the customer base into segments. With respect to individual customers, banks tend to use a simplified segmentation method based on a single criterion. Most often this criterion is the customer's income, as it directly affects his/her financial involvement with the bank. However, extensive customer databases banks have at their disposal, which offer not only the demographic and economic profile of the customer but also reveal the patterns in his use of banking services, provide an opportunity to introduce a multi-criterion market segmentation. There exist specific instruments to achieve this, including the Ward method, which is a type of cluster analysis. The paper describes the procedure for its application and an empirical example of segmentation based on it.