| Since the reform and opening up, China’s rapid economic growth has brought two major trends in the wealth market:accumulation and concentration of personal wealth, which means that the accumulated private wealth tilt to high-income groups, creating the formation of a group of high net worth groups. They hold tens of millions of invested assets and posses a high potential demand for private banking.China’s commercial banks urgent to change the traditional model that survive from the spread between deposit and lending, some way that has small capital occupied and high levels profit become welcome. Private Banking, which has long history and widely favor in foreign banks, gradually moved into the vision of China’s commercial banks.There are590,000high net worth individuals,18trillion of investable assets in our country, while8China’s commercial banks which develop private banking have less than120,000total customer volumes. Confronted this great potential market, Chinese commercial banks need to carefully study the market conditions of the private banking business and the needs of customers, mainly from the factors that affect the needs of private banking clients, the characteristics which in the process of forming the high net worth groups and the distribution of the wealth. Meanwhile, on the basis of classify customers according to certain criteria, to analyze the personalized characteristics of different types of customers.According to Maslow’s hierarchy of needs, human needs distribute by level, then apply this thinking to the field of finance, we can find human’s financial needs in turn are:the safety and liquidity of funds, convenience and functionality, the need for risk management, revenue enhancement and value-added services. With the growing wealth of the people, the level of their financial needs will continue to improve, and private banking financial institutions to launch mainly used to meet the financial needs of the customers with high-level financial needs. Therefore, the outstanding needs of high net worth clients can be discussed from the perspective of risk management, revenue enhancement and value-added services.Face the highlight demand in certain aspects of our private banking clients, Chinese banks in the private banking have some gap to meet the customer’s needs and foreign banks’level. Firstly, ability to balance global configuration is limited due to strict foreign exchange system, while in relatively relaxed policy environment and through offshore funds, offshore companies and other channels, foreign banks have better capability of improving asset global configuration; In the structural design on the profitability of products, foreign banks is based on the strong preference of customers to design the product system, while China’s richest whole highlight the needs of wealth value-added, but the supply of products of Chinese-funded banks are mainly short-term, low-income, conservative products; About value-added services, foreign banks through cooperation with third parties to build an open product platform to provide customers with kinds of value-added services, while value-added services are less involved in Chinese banks.To improve the current situation, the Chinese commercial banks should learn from the operational experience of the foreign banks. First, be sure to note the different needs of customers and on this basis to make a strict subdivision. In the provision of products, be sure to enrich the customer’s optional range of products, in this process, thinking should not be confined to one area or a certain stage and to design the complete, user-friendly, personalized systems to highlight the difference of the private banking business.In response to customer demand for risk management issues, risk score should be based on customer type, which mainly influenced by the higher concentration of the geographical and industry,adding the preference of the additional risk scores, coupled with the risk differences in the types of customers analysis to segment the customer’s risk tolerance; About centralized on the wealth management institutions, the key factor is brand construction, since the return on investment has57.8%influence of the brand, therefore, how to improve the brand influence is still to improve product value-added; On how to deal with the problem of asset allocation needs of the expanding globalization of high net worth clients, Hong Kong has a very strong business foundation of the financial services industry, broad prospects for offshore RMB center, and two sessions during the12th Five-Year Plan draft The proposed Hong Kong as an international asset management center and offshore RMB business center, so in the case of foreign banks accounted for the investment advantages of globalization, Chinese banks could proceed from Hong Kong to start the experience of offshore private banking.Private investment highlights in recent years, and the cooperation of the Merchants Bank and Cape Investment Fund is very successful, the private banks in Chinese banks should rely on their own professional platform and keen to capture some of the better private projects. Alternative investments in other categories can be also helpful to expand the channels of customers’investment, such as works of art, luxury, top red wine and other investment. Minsheng Bank works of art1st is a successful example.Chinese banks in the private banking system, the more traditional products such as cash management class, fixed income can reach the higher maturity level, but these products profitability is not strong. Equity products linked to stock market close, given the current downturn of the stock market, its performance is more limited, and innovative small space is not easy to do the differentiation. How to improve the profitability of Chinese banks private banking products to alternative investments as the starting point.Whether in the theoretical point of view of the tendency from the marginal spirit consumption, or from the actual survey results, value-added services are high net worth clients a greater potential demand. From current statistics, health care, the degree of concern in children’s education, and investment opportunity to introduce value-added services has drawn great attention for two years, Chinese banks can not ignore this demand, especially the wealth of heritage services. In a certain sense, value-added services to better reflect the essential characteristics of the integration of private banking services. Observe the foreign banks successful private banking experience, they pay much attention to cooperate with third organizations. In this regard, Chinese banks should also construct an open platform to meet customers’risk management, revenue enhancement and value-added services, and finally form a pool of comprehensive, integrated financial products and services. |
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