The head of fintech for one of China’s leading internet companies views the asset management sector as a key growth area in future following key changes to the regulatory environment.
April 2018 marked the start of dramatic changes in China’s asset management sector, following the launch of the “Guidance Opinions Concerning Standardisation of the Asset Management Operations of Financial Institutions” (关于规范金融机构资产管理业务的指导意见) by the Chinese central bank, the China Banking and Insurance Regulatory Commission (CBIRC), the China Securities Regulatory Commission (CSRC) and the State Administration of Foreign Exchange (SAFE).
The Opinions brought a slew of dramatic changes to the Chinese asset management sector, chief amongst them the removal of the “implicit guarantees” underlying wealth management products, which had long served as a key channel for smaller banks to tap retail funds.
Chen Shenqiang (陈生强), CEO of JD Digital Technology (京东数字科技) said that prior to the launch of the Opinions, irregular investments and implicit guarantees had been the hallmarks of the sector, bringing about sizeable risk in tandem with rapid growth.
Net value asset management has since emerged as a trend following the removal of implicit guarantees by the Opinions, with Chen pointing out that the sector is still in need of urgent changes to better adapt to the new rules.
Chen made the remarks at the “Fintech Second Half – 1st Asset Management Tech Sector Summit Forum” (金融科技下半场——第一届资管科技行业高峰论坛) held in Beijing on 16 July.
According to Chen fintech will become a new growth point for Chinese asset management operations in future.
“Fintech has already entered the second half, and financial organisations will no longer be restricted by the pursuit of online transactions as in the first half,” Chen said.
“[They] will need to achieve a shift from the purely online to integration between the online and the offline, and from weak finance to strong finance.”
Wang Zhongmin (王忠民), former director of the National Council for Social Security Fund, said that technology would be a key channel for competition amongst financial institutions in future, as well as emerge as a new driver for the growth in the asset management sector.
“Whoever wins this race will be the victor in future,” said Wang.
China’s asset management sector reached around 124.03 trillion yuan in scale last year according to the “2018 China Asset Management Sector Report” (2018年中国资产管理行业报告).
the removal of implicit guarantees had made net value asset management the trend in the se