Wang Lei, assistant general manager, China Merchants Bank Private Banking shares her views with Asian Private Banker in the ‘Final Word’, a ten-part series where the industry’s leaders share their thoughts and opinions on key issues around industry trends, business performance, investment solutions, regulations and compliance, and technology.
Industry trends | What is the state of Asia’s talent pool and did your firm pay significantly higher for new talent? What is your view on private banking talent development in Asia?
From the standpoint of the China domestic market, the growth rate of talent is backward compared with the rapid development of private banking in recent years. CMB has been very concerned about and invests a lot of resources into the development of talent.
On the one hand, we recruit top-notch talents from all relevant fields around the world — including asset management, investment banking, trust, law, and taxation — to ensure that our professionals are at the forefront of the market. On the other hand, great importance is attached to the cultivation of talents. We have established a comprehensive step-by-step training system which has been implemented for many years, transporting a large number of talents to all functions.
Industry trends | How important is it for your business to make substantial inroads in China to ensure sustainability and growth over the next decade?
CMB Private Banking was established in China and, although we have embarked on global expansion for the past few years, Chinese clients are always our main target of services.
Over the past decade, with the rapid growth of HNWIs in China, the domestic private banking business has developed vigorously. In the next ten years, under the macro background of the Chinese economy which is transitioning from a phase of rapid growth to a stage of high-quality development, it’s reasonable to believe that the domestic private banking market will evolve towards being more mature, standardised, and diversified.
Business performance | In the midst of what has been construed as an increasingly difficult macroeconomic environment, how do you think the private banking and asset management industry will perform in 2019? Will it be a year to separate the wheat from the chaff?
I think 2019 will be a tough year for the whole industry. The international political and economic environment is sophisticated and unpredictable, and the stringency and scrutiny of regulators at home and abroad are rising.
This year, China unveiled new rules that regulate the asset management businesses of financial institutions, with the aim of standardising the country’s fast-growing asset management industry. As a result, the current business model of wealth management is not sustainable.
However, CMB Private Banking has been focusing on the strategy of creating differentiated investment consulting services, which are customer-oriented from the outset. In fact, the investment portfolios we build for our clients can withstand market fluctuations better and achieve more robust returns.
Investment Solutions | Ten years on from the GFC, how has your product shelf evolved and how has clients’ perception of structured products changed since then?
CMB Private Banking has always been committed to an ‘open product platform’, incorporating thousands of high-quality financial products from various brands and sectors.
The structured product market has developed slowly in China as Chinese clients are accustomed to low- risk products. However, as China’s capital markets have developed, client knowledge of and demand for structured products have stepped up as well. With low-risk products poised to see significant shrinkage given new regulations, the traditional model of relying on these products will transform. At present, domestic structured products are still in their infancy, with few ELN-based products.
Technology | What emerging technology applications do you expect to reach an inflexion point in their convergence with private banking and wealth management? What impact will they have on the operational models of private banks and wealth managers? Who will be the biggest industry disruptors?
What we are currently doing is applying emerging technologies to improve the aspects of business such as information interaction with customers, investment and risk management, transactions and data processing, among other things. CMB Private Banking’s focus has always been on doing our best to deliver the best private banking client experience. Through the application of new technologies and service models, we are continuously upgrading our capabilities and standards. This will enhance our core competencies and create better products, better services, and greater value for our clients.
Meet 2018’s industry leaders in the full round up of of Asian Private Banker‘s the Final Word 2018.
