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Chinese Academy of Social Sciences and Industrial Bank Jointly Published the Book: Private Banking – Institutions, Products and Regulation

On March 19, the “China Wealth Management Forum (2015) and Launch of the New Book: Private Banking – Institutions, Products and Regulation” organized by the Institute of Finance and Banking, Chinese Academy of Social Sciences (CASS) and jointly sponsored by the Private Banking Department of Industrial Bank (IB) and the Research Center of Wealth Management under the CASS Institute of Finance and Banking was held in Beijing.

More than 80 experts and scholars from financial research institutes, regulatory departments and commercial banks attended the forum and the new book launch ceremony, including Li Yang, Vice President of CASS, Lu Lei, Director-General of the Research Bureau of the People’s Bank of China (PBC), Wang Yanxiu, Director of the Innovation Supervision Department of China Banking Regulatory Commission (CBRC), President Li Renjie and Vice President Chen Jinguang of IB, etc.

China is the region with the fastest growth of rich population in the world, so the development of private banking has a broad prospect. However, this time-honored financial service that sprang up in Europe in the 16th and 17th centuries has just appeared in China for 7-8 years. Which business model should be taken? What services should be positioned? How can we closely follow the essential properties of private banking which is “underlain by consulting and advising, supported by trusted investment and supplemented by value-added services"? These questions require in-depth discussions and consultation as the budding Chinese private banking business still remain unenlightened to the area.

It is learnt that it took 1 year and 7 months to finish the book Private Banking – Institutions, Products and Regulation, the research and compilation of which involved senior professionals from regulatory departments and private banking departments of various institutions, such as CBRC, UBS, Lombard Odier, Citibank, Societe Generale, BNP Paribas and Hang Seng Bank. With a total of 300,000 words, the book, centering on organizational structure, products and services, middle and back stages and regulatory system, presents an in-depth discussion on the issues requiring the greatest attention in the development of private banking. Meanwhile, it covers nearly 40 laws and regulations related to private banking and a great number of business practice cases both from home and abroad. In particular, the “double-line idea” is adhered to in the process of compilation, namely each chapter is jointly written by scholars and insiders to ensure that the contents are both professional and practical.

The experts participating in the compilation and review believe that the book presents creative research results of high quality, which, to some extent, represent the latest development and direction of the study of private banking practice in China, and it will help boost the transformation and development of Chinese private banking in the new period.

Vice President Li Yang of CASS believes that the service targets of private banking should not only include the individual private banking customers but also the family enterprises behind them. The development of private banking is of great avail for financial institutions to make transformation from offering products to providing services. It is helpful for the comprehensive development of the entire finance industry and beneficial to the development of inclusive finance and real economy. Private banking will get fused into the internet finance closely so that more people can enjoy the private banking services. The appearance and development of private banking in China will undoubtedly further boost and deepen the development of China’s finance industry, and improve the capabilities of financial institutions to provide all-sided and all-time financial services. Private banking will be the next highland for financial services.

When mentioning the original intention that the Bank participated in organizing the compilation of the book, as one of the planners of the book, President Li Renjie of IB indicated that commercial banks, as the leading power to provide private banking services at home, have exceptional advantages and assume indispensable responsibilities in pushing ahead the transformation and development of private banking. In terms of advantages, domestic commercial banks, especially large- and medium-sized banks, boast many service networks and extensive customer foundation, and with development in recent years, such large- and medium-sized banks generally hold a variety of financial licenses for banking, trust, fund and lease, etc. Thus, they can not only mobilize a considerable amount of internal resources, but also boast greater strength in integrating various external resources. The advantages provide a good foundation for the transformation and development of private banking. In terms of responsibilities, commercial banks constitute a large economic volume and have a wide social influence, so they ought to play a model role in pushing the transformation and development of private banking and take the lead to build a sound and ordered market environment. Of course, we expect more that, with the spreading of its research results, the book can further inspire a correct wealth view among the domestic HNWIs, and improve the quality of private banking services, accumulation of social wealth and development of charity cause.

Stepping into the field of private banking since 2011, IB has now attracted more than 18,000 customers in total, with a total of nearly RMB 200 billion customer assets. The Bank has launched in succession the products of managing wealth for customers under active management, exclusive custom products for private banking customers, agency products and entrusted investment products, and offered value-added services to customers such as exclusive legal consulting, Business Jet Club, Expert Forum, and Overseas Education Manager. A few days ago, IB and Industrial Trust, one of its subsidiaries, jointly released the business of family trust, and the first custom family wealth planning and management plan for high-end customers has been put into operation. When delivering a speech at the forum, Vice President Chen Jinguang of IB indicated that the private banking of the Bank would further transform from being product-driven to being consulting-driven in the future, and establish a service system with distinctive characteristics and competitive edges.