The Chief Executive Carrie Lam said a few days ago that a lot of work on cross-border financial management has been completed, and I believe that the opening date should be announced soon.
Bloomberg reported citing research data that predicts that after the launch of "Lai Caitong", the renewal revenue alone can bring banks US$464 million (about HK$3.62 billion) each year.
Zhou Guochang, deputy general manager of the Personal Digital Financial Products Department of Bank of China Hong Kong (2388), believes that there are huge opportunities for "Licaitong", and it is predicted that it will bring higher income to the industry, and the relevant amount is expected to exceed 700 million US dollars.
The bank is confident that it will be the first batch to provide "Licaitong" products, and its market share is expected to be the first.
In recent years, many cross-border customers have inquired about Licaitong. As of May this year, the AUM of BOCHK's cross-border customers has increased by nearly 40% year-on-year, which proves the eager demand for wealth management in the south.
At the same time, as of the end of May, Hong Kong's renminbi deposits rose nearly 20% year-on-year to 821.1 billion yuan. Zhou Guochang pointed out that the data proves that the demand for renminbi is also increasing.
Therefore, Licaitong is launched, and the demand from the north to the south is expected to be equally hot.
Zhou Guochang, deputy general manager of the personal digital financial products department of BOCHK, predicts that the north-south demand for wealth management links is also hot.
(Photo by Jiang Liqi)
Wealth management materials cover three types of products
BOCHK expects the first phase of Licaitong to be launched. It is believed that two types of banks can participate, including retail banks and private banks.
At the same time, the industry expects that three types of products will be covered under Licaitong, namely funds, bonds, and deposit (foreign exchange) products.
Zhou Guochang reminded, "Whether it is going north and south, both sides need investor education, because the understanding of wealth management products on both sides is different."
He pointed out that it is conservatively estimated that more than 800,000 Hong Kong residents in the Greater Bay Area have Mainland accounts. Among them, the biggest demand is mainly for consumption, such as travel and retirement, but there is very little investment. Therefore, the introduction of Licaitong can meet their needs.
On the other side, the southward demand cannot be ignored.
Taking Shenzhen and Guangzhou as examples, 90% of mainland customers who are interested in investing have a college degree, and 30% of customers under 40 are very interested in ESG products.
As of the end of April this year, the sales of ESG funds have risen sharply by more than 10 times year-on-year, reflecting that investors' acceptance of ESG funds has increased significantly.
The bank expects that in terms of wealth management products, nearly 100 products will be included in the scope of cross-border wealth management. There are many product choices and ESG (environmental, social, governance) related products are provided, which are expected to attract the needs of customers going south.
Licaitong will be opened soon, and BOCHK does not expect to hire frontline personnel on a large scale in the short term.
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Will not hire on a large scale
It is rumored that mainland residents can open a local wealth management account by witnessing the account opening form, without having to come to Hong Kong in person.
Zhou Guochang said, "(Even if guests who go south choose to open an account remotely, they will also consider the coverage of bank outlets. For example, how many branches? Is it convenient?"
In addition to the bank's branches and products, customers will also consider the bank's online wealth management services.
Zhou Guochang also pointed out, "Take Shenzhen and Guangzhou as examples. In daily life, mobile phones do not leave their hands. Mainlanders are very familiar with electronic products, and they don't even need cash when traveling. Therefore, they will choose to be a powerful bank online." It continued that in the industry, BOCHK Mobile Banking provides many wealth management services. In the future, it will mainly invest in online mobile banking services. "In the Greater Bay Area, the Bank of China Group already has more than 1,000 branches, and there are enough Handling the business manually, so the launch of Licaitong will not hire a lot of frontline personnel on a large scale in the short term."
He predicts that 300,000 people will use Licaitong in the first stage. "The superimposed quota from the north to the south is 300 billion yuan. Dividing 300 billion yuan by the 1 million personal quota is 300,000 people. I believe that Licaitong has responded enthusiastically. If there is rigid demand, it is expected that the authorities will increase the quota accordingly, and Cai Caitong will gradually make progress."
The opening of Caitong helps the southbound guests to allocate assets to diversify risks.
(Reuters)
Licaitong helps to allocate assets in the south
Asked about the capital needs of the south, Zhou Guochang said, “There are two factors for customers going to the south to use Licaitong. The first is risk diversification, including currency risk and asset risk. The second is to ensure long-term income. Short-term returns can increase stable income in different economic cycles. In contrast, domestic financial products have a relatively short investment period and provide high-risk and high-return products. Therefore, Licaitong can help mainland customers achieve asset allocation."
In addition to the hot demand in the south, the demand in the north is not too much, because there are many choices of RMB products in the north, and the returns are higher. The RMB-denominated wealth management products provided by Hong Kong have a high return of 2 to 3%; in the mainland market, some RMB wealth management products The product has a return of 4 to 5%, which is expected to be attractive.