The "China Financial Innovation Forum" and the 2021 China Financial Innovation Achievements Online Conference hosted by The Banker Magazine were held in Beijing, the theme of this forum was "Digital Transformation of Banks: Paths and Strategies", and Chen Xiaodong, senior expert of the Personal Finance Department of agricultural bank of China, attended the roundtable forum and delivered a speech in the roundtable forum with the theme of "Innovation Discussion on Wealth Management and Common Prosperity".
General Secretary Xi Jinping delivered an important speech at the conference celebrating the 100th anniversary of the founding of the Communist Party of China, pointing out that "more obvious substantive progress has been made in promoting the all-round development of the people and the common prosperity of all the people.". In the opening year of the "14th Five-Year Plan" and the critical period of striving toward the second centenary goal, common prosperity will not only help our country to make the cake bigger, but also help to divide the cake well and form a healthier and more stable social form, which is of great significance to continue to support the sustained and healthy development of China's economy and society.
At present, all walks of life are exploring how to help our country achieve common prosperity. In developing wealth business and helping common prosperity, agricultural banks have both missions and feelings, as well as foundations and conditions.
Why do you say that there is a mission and a feeling? Because in order to achieve common prosperity, "raising the lower and expanding the middle and raising the high" is an important direction, especially the expansion of the middle-income group, and the formation of an olive-shaped society is the focus of policy formulation. At present, China's middle-income group has exceeded 400 million people, and according to experts, this group may reach 800 million people by 2035. According to the data of the Seventh National Population Census, China's urban population currently accounts for 64%, and the population of counties and townships accounts for 36%. In the process of the expansion of the middle-income group, the majority of county and township residents are getting richer, which is a very key factor. As one of the four state-owned commercial banks, the Agricultural Bank of China has shouldered the mission of facing the three rural areas and serving urban and rural areas at the beginning of its listing. In this sense, helping the majority of county and township residents become richer is the responsibility of the Agricultural Bank of China, and it is also the feeling of service of the agricultural bank.
The ABC also has the foundation and conditions to help China achieve common prosperity. ABC has 860 million customers, nearly 23,000 outlets and about 13 trillion yuan of personal deposits, which are the largest of the four major banks. And more than half of the deposits, customers, and outlets come from or are distributed in the county. Therefore, the ABC has both a mission and responsibility, as well as a foundation and conditions, in helping the majority of residents, especially county residents, to achieve common prosperity.
In terms of contributing to common prosperity, ABC has made some innovations and attempts in products and services. In terms of products, the focus is on providing customers with wealth management products that can increase property income. In the past, many customers were more deposit-only, and with the continuous reduction of the income of deposit products, it is necessary to promote the transformation of customers from simply holding deposits to the comprehensive allocation of wealth management products. In 2014, the scale of wealth management assets of Chinese residents exceeded that of deposits for the first time, and by 2019, the proportion of wealth management assets in personal financial assets increased to 58%. However, compared with other countries, the scale of wealth management in China is still very small, the scale of wealth management in the United States and Japan has reached twice and three times the GDP respectively, while the current China is only 1.2 times, from this point of view, China's wealth management business has a very broad space for development.
From the perspective of improving residents' property income, the Agricultural Bank of China regards public funds as the core product of wealth management. Public funds have the nature of inclusive finance and can help residents share the benefits of the capital market. In recent years, the money-making effect of public funds has become increasingly obvious, and the scale has grown rapidly, and the scale of new funds in 2020 will reach 3 trillion yuan, which is the sum of the three years from 2017 to 2019, and the current scale of public funds has reached 23.5 trillion yuan. In terms of public funds, the innovation made by ABC mainly revolves around how to help customers get more stable income and better investment experience from the purchase of funds, which is very important to strengthen product screening capabilities, ensure product quality, and help customers choose good products. The Agricultural Bank of China implements a hierarchical classification system for the access of public funds, and through strict screening criteria, divides the products into five-star, four-star, three-star and general, in addition to the top series of "ingenuity" products, including the "ingenuity preferred" of the equity class and the "ingenuity escort" of the fixed income category. By guiding customers to purchase high-star products, we help customers choose more stable products, have a greater probability of obtaining positive returns, and have better drawdown control, thus effectively improving customer investment experience. As of August 31, 2021, ABC's initial offerings this year had the highest net value of 1.47 and a minimum of 0.85. In this year's capital market volatility, many funds fell more in the net value of the environment, the performance of the ABC's initial fund is relatively stable.
In addition to public funds, ABC also guides customers to allocate assets. The more popular method is the "1234 rule of household asset allocation" - 10% of the money to be used, the allocation of liquid demand deposits or monetary funds; 20% for insurance protection of money, agency insurance is the advantage of the Agricultural Bank of China, customers in the face of pension, health protection, risk prevention, wealth appreciation and inheritance and other aspects of the demand, can choose a variety of types of insurance products; 30% is to make money, to help customers configure equity funds and other products with higher yield attributes; 40% is long-term preservation and appreciation of money , for customers to allocate fixed income funds or stable wealth management, large certificates of deposit, precious metals and other products. In this way, customers can gradually obtain more stable property income, which is the main practice in terms of products.
The innovation in service is mainly to provide customers with a full journey of service and companionship. ABC provides wealth physical examination and asset allocation services on the bank, as long as it is a registered customer of the ABC bank, it can enjoy this service, and the vast number of outlets of the ABC can also provide customers with one-on-one offline services. ABC attaches great importance to investor education, specially in the "Agricultural Bank of China Retail Bank" WeChat public account to open up the "ABC Wealth Road" special area, for customers to share investment ideas, pass on investment skills, more importantly, to help customers establish long-term investment philosophy and habits, only in this way, in order to a certain extent, in order to solve the problem of fund making money and people do not make money, so that customers can better enjoy the development dividends of the capital market. Since last year, ABC has introduced many closed-end funds with a term of half a year to a year or even longer to help customers cultivate long-term investment habits.
Finally, do a good job of post-investment accompaniment for customers. If there is no post-investment accompaniment, many customers may give up halfway, or irrational investment behavior, which will cause damage to customer returns. ABC innovatively launched the Wealth Management Intelligent Customer Service System, which won the Innovation Award in the banker magazine's selection. The system integrates big data and artificial intelligence technology into the pre-sale, sale and after-sales links of wealth management products, and intelligently prompts customers in 14 scenarios. For example, when the market rises significantly, prompt customers to invest in returns; prompt customers to evaluate and make decisions in a timely manner when the fund risk level and fund manager change; prompt customers to pay attention to them in time when the fund is closed, and so on. Through this system, ABC provides full-process companionship services for customers throughout the cycle from purchase to holding products, which reflects the continuous care for customers and receives good responses from customers.
Chen Xiaodong is a senior expert in the Personal Finance Department of the Agricultural Bank of China
This article originated from Banker Magazine
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