The pain points of wealth management sales have been saved, and the central data exchange platform has opened the way for small and medium-sized banks

Important progress has been made in the construction of the infrastructure of the bank wealth management market.

On January 18, the Banking Wealth Management Registration and Custody Center (hereinafter referred to as the "Custody Center") held the launch meeting of the Central Data Exchange Platform for Wealth Management Products (hereinafter referred to as the "Central Data Exchange Platform"). According to reports, the platform is a centralized and unified platform for the standardization, confidentiality and automatic transmission of business data between bank wealth management market institutions, and at present, BOCOM Wealth Management and Sanxiang Bank have been launched together with the central data exchange platform as the first batch of customers.

After the promulgation of the new regulations on wealth management, banks have gradually changed from "issuance + sales" of wealth management to the role of consignment sales, coupled with changes in the attractiveness of products in the transition period of net worth, the pain points and opportunities of industry sales coexist.

Some bankers told reporters that the unified data standards and interfaces will help wealth management companies expand product sales channels on the one hand, and on the other hand, it can help more distribution agencies, especially small and medium-sized banks, quickly access issuing institutions, further promote the interconnection of wealth management business, and enhance market scale.

Support wealth management companies to expand sales channels in batches

In May 2021, the China Banking and Insurance Regulatory Commission (CBIRC) issued the Interim Measures for the Administration of the Sales of Wealth Management Products of Wealth Management Companies, which put forward clear requirements for system networking, information disclosure, sales publicity and transmission of business information.

Among them, in December last year, on the eve of the end of the transition period of the new asset management regulations, the CNCBI wealth management product terminal direct connection system passed the on-site acceptance of the custody center and went online, becoming the first wealth management company to realize the direct connection of wealth management products, marking that the bank's wealth management officially entered the comprehensive, real-time, dynamic and penetrating management stage.

The so-called "system direct connection", that is, through the system docking, the data is directly transmitted from the bank's internal system to the financial registration system, eliminating the manual entry process, which can realize the unified report, unified registration, unified coding, unified disclosure and unified registration of practitioners of bank wealth management products.

According to the relevant person in charge of the hosting center, the central data exchange platform is independently designed and developed by the hosting center under the guidance of the regulatory authorities and the central settlement company, and will realize the interconnection between participating institutions through a private network, and provide data information and text information sending, verification, forwarding and receiving of data information and text information for each participating institution.

By establishing a unified data exchange standard for the wealth management industry, the platform can support market institutions to expand sales channels in batches, effectively solve the problems of non-uniform data exchange standards and non-standard interfaces between issuing institutions and sales agencies, eliminate industry pain points that need to be docked one by one between institutions, reduce information transmission costs, and improve market operation efficiency. At the same time, the platform completely records the data transmission process between the issuer and the sales agency, which can further regulate the sales activities of wealth management products, facilitate investors to purchase wealth management products, and help clarify the rights and responsibilities of both parties and protect the legitimate rights and interests of investors.

The first financial reporter previously learned that with the birth of wealth management subsidiaries under the new financial regulations, the original "head office design issuance + branch sales" model of wealth management products has been broken, the role of banks has been transformed into a pure agency agency, and at the same time as selling their own wealth management subsidiary products, they will also sell other wealth management company products, and the business overlap between institutions has increased significantly, but because the data exchange standards and interfaces are not uniform, almost every cooperation requires one-to-one special "customization", which is less efficient.

"In the future, it will be much more convenient to connect between the issuing agency and the distribution agency." Dong Ximiao, chief researcher of CmF, told reporters that on the one hand, the platform helps the distribution platform to expand product sales channels, on the other hand, it can allow the distribution agency to access more issuing institutions, and the ultimate significance is to expand the overall sales scale of the financial market.

According to the wealth management market data previously released by the custody center, as of the end of September last year, the existing scale of the bank wealth management market reached 27.95 trillion yuan, an increase of 9.27% year-on-year, and the proportion of net worth reached 86.56%. Among them, the product survival scale of 21 officially opened wealth management companies reached 13.69 trillion yuan, accounting for 48.97%.

Small and medium-sized banks may take the lead

In fact, with the transformation of net worth entering the end, financial sales have also ushered in a painful period.

The data shows that after entering the transition period of the new asset management regulations, the yield of wealth management products in the whole market has continued to decline, coupled with the impact of the new regulations on liquidity supervision, the attractiveness of wealth management products, especially cash management products, has dropped significantly. Statistics from East Asia Qianhai Securities show that as of January 9, 2022, the expected annualized yield of 3-month products was 1.92%, unchanged from the previous week, but the expected yield of the 6-month period fell by 26BP again from the previous week, falling to 2.98%. Previously, the yield of 1-month wealth management products of large banks has dropped to a new low in nearly 5 years.

The first financial reporter also found in the visit that with the overall decline in the yield of wealth management products, coupled with passive or active pressure drops such as large certificates of deposit and structured deposits, the wealth management managers of major banks are more inclined to recommend capital-protected insurance products and fund portfolios to customers, and the two are more popular with customers because of the expected higher yield and relatively stable risk.

The list of consignment products displayed to customers by the wealth manager of a branch of the Bank of China in Beijing shows that the bank's consignment products are mainly BOC wealth management, and the products of other banks' wealth management subsidiaries are mostly open products. The wealth manager said that under normal circumstances, banks still recommend their own wealth management sub-products to customers.

A number of industry insiders told reporters that the launch of the central data exchange platform is of great significance to expanding the scale of consignment sales and enhancing marketization. According to the disclosure of the custody center, at present, BOCOM Wealth Management and Sanxiang Bank, as the first batch of customers, have been launched together with the central data exchange platform; Huaxia Wealth Management and Baixin Bank have completed the joint investigation and testing work; Bank of Suzhou, Nanyin Wealth Management and other institutions have entered the joint investigation and testing stage; 27 wealth management companies and other market institutions have signed the Memorandum of Cooperation with the wealth management registration center.

Dong Ximiao believes that in the future, small and medium-sized banks will play an important role in expanding the scale of wealth management consignment sales, and it can be seen from the banks that have taken the lead in accessing the platform that small and medium-sized banks are actively participating in it. "Small and medium-sized banks, especially small banks without wealth management sub-banks, can not issue (wealth management products) after the consignment sales will become the main direction of force, but according to the original docking model, if a small rural commercial bank wants to sell a certain head of financial products, the other party takes into account the cost of system docking, because too much trouble may not be willing to cooperate, and now the platform can solve this problem." Dong Ximiao added.