A few days ago, CN Benefit released the Report on the 2014 Bank Ranking of Wealth Management Strength (hereinafter referred to as the Report), in which joint-stock banks still have an eye-catching overall performance and Industrial Bank (IB) topped the list in terms of annual overall wealth management strength.
CN Benefit is the research support institute designated by many authoritative media, and its yearly Report is regarded as the vane for appraisal of wealth management strengths of banks in the domestic market. Its all-round assessment of wealth management strengths of banks are based on six indexes of wealth management products, namely issuing power, earning power, risk control, diversity, standardization of information disclosure, and assessment questionnaire.
As revealed in the Report, all banks issued a total of 79,051 wealth management products in 2014, up by 39.11% over the previous year, and all the products issued were worth RMB 100.5 trillion, up by 78.1% over the previous year. On one hand, this indicates that the residents have an increased awareness of wealth management and increase their investment in the area. On the other hand, this also shows that banks still remain to be a stronghold in the area of wealth management, winning the prevalent trust of investors.
IB, ranking No. 1 in the annual list of overall wealth management strength, made its presence in the top 5 in the three individual indexes including issuing power, earning power and risk control power, and secured the second place in the link of assessment questionnaire.
After the release of the Report, the reporter made an interview with IB with regard to the outstanding achievement.
Diversified products with distinctive features
China has entered the age of nationwide wealth management. Against such a background, the returns on conventional savings deposits have already no longer been attractive to financial consumers who have a strong desire to increase the value of their assets, nor could a single type of wealth management product.
How can we meet the demands of most financial consumers for “higher return and more diversified products”? “Essentially, what we can do is to follow the principle of ‘putting customers at the center and creating values for them’ well”. Vice President Yan Xuewang of the Retail Banking Headquarters of IB thinks that it is simple to make a summary, but it requires our perseverant efforts to live up to the principle.
IB has put forward the concept of “all-round financial assets” early in the industry. In recent years, the Bank has made active transformation, done great endeavor to promote greater investment banking and greater assets management based on the integrated business advantages of the group, and kept extending the wealth management reach with increasingly diversified wealth management products, which have been shifting from the closed type to open type and from the type of expected returns to that of net worth. Now, IB has six product families, including Daily WLB, Daily WHT, Cash Treasure and Zhi Ying Bao, with different terms, rates of return and risk levels, so as to meet the investment needs of different customers. In 2014, the Bank issued more than 500 kinds of wealth management products in total.
In the opinion of Shi Linchang, Chief Strategy Analyst of Huafu Securities, “Cash Treasure”, the family of open wealth management product of IB, has a great competitive edge in the market. Investing in basic assets with steady incomes and low risks such as treasury bonds, financial bonds and corporate bonds of high credit rating, the product family features high liquidity, incremental incomes and low investment risks. For instance, the “Cash Treasure No. 1”, which has won great popularity among the stock investors, connects the securities trading time seamlessly. Investors can made subscription and redemption on every business day and see wealth management returns upon the day of subscription. The reference rate of return for the product outperforms that of fixed 5-year deposit.
In 2014, IB launched the first structural wealth management product in the real sense – Zhi Ying Bao. With principal and fixed returns guaranteed, this product family can also have floating returns from linked derivatives on the basis of guaranteeing the fixed returns, providing a platform for moderate investors to get higher returns. Hence, it has soon become a model in the industry.
The concept of creating wealth management products with stress put on meeting individualized needs of customers and constant development of special products for target groups, areas, periods and channels have brought IB a considerable growth of customers.
For instance, IB released “Enjoyable Life”, the first integrated financial solution for senior customer groups over 50 years old in China, offering tailored old-age wealth management products specially for the senior customers, which can maintain value steadily. Furthermore, in order to eliminate the inconvenience of office workers to handle wealth management products in the business hours, the Bank released the “Wealth Management Night Market”, with which white collars can purchase wealth management products via internet banking and mobile banking systems of the Bank from 18:00 to 24:00.
“Wealth management supermarket” with choice products
It is unavoidable to have inadequate supply if products are issued only depending on the bank itself.
Based on the Report, the average EI value (rate of return upon maturity/theoretical interest rate of deposit in the same period) of IB’s wealth management products is above the average level of all banks. Fundamentally, it cannot do away with that IB has in recent years actively built the agency sales platform to sell outstanding products of other institutions and strived for building a wealth management supermarket with choice products.
According to the introduction of relevant officers of IB, the Bank has laid great stress on the selection of cooperative companies in the areas of fund, trust and brokerage, and actively got involved in key links such as product design, assets management and risk control, so as to ensure that all agency products put on sale are choice ones with value and security guaranteed.
At present, there are over 500 fund products, over 300 assets management plans and nearly 100 aggregate trust and brokerage wealth management plans which the Bank sells as an agency. Of them, quite a few are star products seeing hot sales in the market.
For example, the first internet big data index fund based on equity in China “GF CSI Baidu BAIFA Strategy 100 Index Fund”, for which Industrial Bank (IB) served as a lead agency in 2014, witnessed the “last-day proportional allotment” which can be rarely seen in the fund sale market. Over the nearly 5 months since its issue, its rate of return has gone up over 40%.
Moreover, ICBC Credit Suisse Financial and Real Estate Fund, for which the Bank serves as a sales agency, ranked No. 1 in the market in 2014, witnessing an increase of 102.49% accumulatively.
Amid the ups and downs of the capital market, IB has grasped the opportunities to win in the area of retail wealth management again and again with its acute market sensitivity and risk judgment.
Professional wealth management with greater guarantee
In order to offer professional one-to-one wealth management service to customers, the Bank has constantly intensified its efforts to organize the team of financial planners. By the end of 2014, there were more than 3,100 employees holding AFP certificate and more than 400 holding CFP certificate. All wealth management managers hold relevant certificates, and should take part in various professional trainings and the contest of financial planners to improve their professional proficiency.
Besides returns, security is the greatest concern of customers, and all banks must keep an eye on it closely all the time.
As revealed in the Report, the number of products with fixed returns that realized the reference rate of return as announced by IB in 2014 reaches 3226, “far higher than that of any other bank. Furthermore, the Bank has made an outstanding performance in terms of returns. As a result, it topped all the nationwide commercial banks in the aspect of risk control power.”
The person-in-charge of the Assets Management Department of IB, which is established mainly for creating wealth management products, indicates that the wealth management service of the Bank has always been established in the basic property of “managing wealth for customers”, built scientific, reasonable, standardized and efficient procedures and operation mechanisms at all operating links of products, and erected an effective firewall between self-running products and agency products.
To be specific, in the area of credit risks, IB has intensified the management of admittance and existing period of basic assets; in the area of liquidity risk, it has formed a well-established index system for the management of liquidity risks regarding wealth management to monitor the allocation of liquid assets for wealth management products in real time; in the area of operating risks, it has strengthened system building to improve the intelligent level of monitoring and management.
“The standardization of sale and information disclosure of wealth management products is the bottom line that cannot be broken through. Only in this way can customers accurately recognize and truly bear the risks of wealth management products.” Explained the above person-in-charge.
As revealed in the Report, IB topped the list in terms of disclosure of maturity information as “the Bank made a better performance than other banks did in disclosing the number of products with rate of return upon maturity and their proportion in all the mature products of the Bank”.
Combination of online and off-line channels
Good products cannot do away with convenient and accessible channels. The service channels of IB for wealth management products in 2014 presented a scene with both online and off-line ones.
First, it made innovation in extending the off-line channel. After taking the lead to launch the first licensed community sub-branch in China in 2013, the Bank accelerated the arrangement of community sub-branch outlets in 2014. By the end of 2014, it has opened nearly 600 licensed community sub-branches.
Sending wealth management services to the doorways of tens of thousands of families, community sub-branches bring great convenience to customers, particularly mid-aged and senior customers who are not accustomed to the operation of electronic self-service channels. The Bank has also developed special wealth management products for community sub-branches. In the meantime, it went to communities to carry out publicity activities on the protection of consumers’ rights covering financial knowledge, combat against counterfeit money and prevention of financial fraud, thus offering more considerate wealth management guarantee to residents.
While establishing off-line outlets, IB has also actively pushed ahead internet finance, building a round-the-clock wealth management platform with both efficient and convenient online and off-line channels.
After innovatively launching the internet wealth management brand – “Money Manager” in December 2013, the Bank launched “Manager’s Wallet” in March 2014, which can be used both for wealth management and as a “transfer stop” of payment. With such products, the Bank has witnessed continued increase in the scale of terminal customers. By the end of 2014, the number of customers signed online with “Money Manager” hit 1.0731 million, and the assets managed under “Manager’s Wallet” hit RMB 55.141 billion. And later, the Bank released the direct bank in June 2014, with which the wealth management products sold around the year were worth more than RMB 68 billion. In the first season of “Wealth Management on Mobile Phones”, which the Bank launched in full swing in last year, also attracted nearly 200,000 customers, who bought wealth management products worth more than RMB 100 billion.
By the end of 2014, the scale of personal all-round financial assets managed by IB hit more than RMB 1 trillion and the number of core retailing customers reached more than 4.2 million. When mentioning the future business direction, the person-in-charge of the Retail Banking Headquarters of IB said: “We will continue following the customer-centered principle and serve as a considerate wealth manager of customers.”