Wang Ya, general manager, Private Banking Centre of Bank of China shares his views with Asian Private Banker in ‘The Final Word’, a year in review by the region’s private banking leaders as they share their thoughts and opinions on key issues around industry trends, business performance, investments, regulations, and technology.
Industry Trends | In what ways has the COVID-19 pandemic irrevocably changed the private banking industry and your own bank’s approach to operations and service?
The COVID-19 pandemic has inevitably affected the private banking industry, which has traditionally relied on customised and face-to-face servicing. At the same time, the pandemic has brought
opportunities for the further development of customer relationship management and business models.
Firstly, we have seen growing demand for inheritance services. The pandemic outbreak enhanced customers’ risk management awareness, leading to a greater demand for services such as family wealth protection and family trust service. Also, the pandemic has accelerated the need for online and digital services across the advisory process. In order to break through the “time and space limitations” to serve our customers, we have actively adapted to the trend of online transformation and increased investment in systems and mobile application development. Despite the fact that the pandemic has inevitably discouraged face-to-face interactions with customers to exchange ideas , it has not prevented us from accurately delivering high-quality services to our customers in need.
Industry Trends | Few can deny the importance of Asia’s onshore wealth markets — in terms of asset pools and the need for wealth management from increasingly sophisticated domestic investors. What opportunities do these markets bring to your business, and to what extent will ‘onshoring’ shape your strategic agenda?
Mainland China remains the most important growth opportunity for the wealth management industry, with the ongoing development of the Greater Bay Area (GBA) cited as a key driver. The announcement of the launch of a Wealth Management Connect Scheme in the GBA is a positive step, although the needs of domestic investors, especially those in mainland China, are still maturing.
On 18 December 2020, Bank of China Private Banking released the Report on Family Wealth Management of Chinese Entrepreneurs. The research found that the wealth management needs of (ultra) high-net-worth individuals represented by Chinese entrepreneurs are becoming more comprehensive and diversified. To be specific, their wealth management needs have been gradually expanding from the personal wealth preservation and appreciation to family wealth protection, management, governance and inheritance, considering all family members as a whole. Customer demand is constantly evolving, and the industry pattern on the supply side is still being explored. It can be said that this is an immense opportunity for the entire wealth management and private banking industry.
Business Performance | NNA gathering and account opening have proven challenging in a pandemic-affected world. If we continue to experience lockdowns and travel restrictions in 2021, how can private banking businesses adapt?
Despite the challenging environment, the private banking industry has remained resilient. COVID-19 and further lockdowns are likely to fundamentally change our operating models, as well as client expectations and investment strategies. At BOC, we are striving to transform our sales and service operation models, adapt our product suites and equip staff with the tools and technologies to effectively serve customers. The shift to digital is accelerating with the establishment of our innovative CIO platform.
Investments | From a portfolio perspective, how important will (a) Chinese assets and (b) alternative investments be for delivering clients’ objectives over the next five years?
On 18 December 2020, Bank of China published its Report on Global Asset Allocation Strategy by Bank of China Private Banking. In the report we hold that, in the new global context, the global wealth rebalancing process will accelerate. China’s core assets are expected to be revalued and become benchmarks for long-term capital allocation in the domestic and global markets. The Chinese stock market is poised to end its history of “short bulls and long bears” and become a highlight of global markets. Driven by the stabilisation of the overall economy, the improvement of corporate profits, the increasing demand for asset allocation, the acceleration of China’s opening-up policies, as well as a series of reforms in the capital market, China’s economy will also make further progress on the road to recovery, which will provide greater opportunities for the development of the family wealth management industry and the personal wealth management market.
Investments | (b) What key investment themes shape your bank’s 2021 outlook — and why?
In the context of the global economy entering the post-pandemic era in 2021, our analysis is based on a review of valuation, economic growth, and macroeconomic policies. We suggest that investors focus on commodities, equity, gold, and bonds in 2021. In terms of global stock market, more attention should be paid to the convergence and regression to fundamentals. The demand for crude oil is likely to pick up due to the global recovery environment.
Investments | What important steps did your bank take to drive the sustainable investing agenda and to increase access to sustainable investing opportunities in 2020?
In order to provide a better asset allocation service, Bank of China has built a comprehensive and systematic investment strategy system, in which the annual asset allocation report sets the tone for SAA investment for the subsequent year, while the quarterly/weekly/daily reports focus on mid-term tactical asset allocation, and short-term trading suggestions.
Technology | Where do you see the best application of data analytics/machine learning in private banking?
Big data analysis and machine learning have a great significance both internally (internal management) and externally (customer service) for us. On the one hand, big data analysis is helpful in terms of refining customer profiling and accurately understanding customer investment behaviours. On the other hand, big data analysis is widely used in the field of investment and trading. It can help formulate trading strategies, generate investment recommendations and optimise investment performance.
Technology | How is your bank optimising the utility of the relevant digital tools to prepare frontline staff for client engagement in a post-pandemic environment?
In the post-pandemic era, we will fully embrace the employment of emerging channels and the use of digital tools to reduce operational risks, increase efficiency and optimise service experience.
The first step would be improving of our CRM system with an optimised integration of trading systems, marketing systems, and “portfolio performance diagnosis functions”.
At the same time, we are committed to establishing an online platform to disseminate efficiently our investment strategies to empower our RMs and ICs with timely solutions and digital tools so as to provide customers with professional and customised services.
Meet 2020’s industry leaders in the full round up of of Asian Private Banker‘s The Final Word 2020.