As the world's second largest economy, China's economy has been booming in recent years, with the rapid growth of domestic residents' wealth and the expansion of the size of high-net-worth groups.
As the first joint-stock bank private banking institution in China, IB Private Bank adheres to the customer-centric philosophy of the bank, and mainly focuses on high-net-worth individuals who are mainly entrepreneurs, as well as the enterprises and families behind them. Remarkable progress has been made in public-private integration, digital empowerment, family offices, etc., and efforts have been made to build a high-quality private bank with distinctive IB characteristics。As of the end of November 2023, the number of private banking customers is close to 70,000, and the scale of assets under management has reached nearly 900 billion yuan, making steady progress in the new pattern of the highly competitive industry.
Strategy upgrade: shift from "sell-side thinking" to "deep service".
After more than 40 years of reform and opening up, with the rapid rise of China's economy, the rise of domestic high-net-worth groups has also emerged, providing huge market opportunities for private banking and wealth management businesses。According to the Hurun Report 2023 China High-Net-Worth Families Cash Flow Management Report, there are 5.18 million "wealthy families" in China (household net assets of up to 6 million yuan, and "high-net-worth families" (household net assets of up to 10 million yuan. 80,000 "ultra-high-net-worth families" (household net assets of 100 million yuan).
The market potential is huge, and banks are competing fiercely in the private banking space. Dai Xuxian, General Manager of the Private Banking Department of Industrial Bank, said that private banking, as a key component of the wealth management system, not only connects the bank's assets, liabilities and off-balance sheet business, but also creates new income for the investment banking business**。As a result, domestic banks are becoming increasingly competitive in the wealth management space for high-net-worth clients. "However, how to maintain the growth of customer value and establish its own competitive advantage is an important challenge for every bank's private banking business. ”
McKinsey has pointed outIt is imperative that wealth management institutions should create a refined business model oriented by integrated solutions to the unique needs of different customer groups
On the basis of long-term market tracking, IB Private Banking keenly finds that with the rise of the new economy and new industries, the number of wealth growers who have achieved both personal and corporate value growth in the development of enterprises has increased significantly, and their demand for financial services is strong。Therefore, in-depth understanding of the wealth management needs of this group and providing corresponding solutions has become an important direction for private banking business worthy of in-depth thinking and practice.
According to the Hurun Report 2023 China High-Net-Worth Family Cash Flow Management Report, the high-net-worth group is mainly composed of business owners, gold collars, real estate investors and professional stockholders, of which business owners account for the highest proportion of 52%, an increase of two percentage points from last year. In addition, according to the survey of the Prospective Industry Research Institute, the demand for wealth management of entrepreneurs representing high-net-worth groups has expanded from individuals to the protection, management, governance and inheritance of family members, family enterprises and the overall wealth of the family, showing a trend of integration.
For a long time, IB Private Banking has been focusing on providing high-quality comprehensive financial services for entrepreneurs, and has made remarkable achievements in the new development pattern hand in hand with them。Especially in recent years, with the continuous growth of high-net-worth groups, new economy entrepreneurs and executives promoted by industries such as "specialization, refinement, and innovation" have become the main customer group, and nearly 40% of the bank's private banking customers are from this group, and this proportion is expected to further increase in the future. In addition, this customer group has a high level of education and a broad vision, and its wealth management needs have expanded from simple asset preservation and appreciation to complex fields such as business operation and family inheritance.
Dai Xuxian said: "Correspondingly, the Bank has shifted its business strategy from 'sell-side thinking' to 'deep service', focusing on the executives of listed companies and 'specialized, refined, special and new' and other growth enterprises, as well as focusing on new energy, smart vehicles, photovoltaics, semiconductors and other emerging fields in line with the national strategic transformation direction, fully supporting the development of innovative small and medium-sized enterprises, and striving to become the preferred major wealth management bank for domestic entrepreneurs." ”
Upgrading of playing style: "people's enterprise" integration + digital empowerment
The bank emphasizes that wealth management should be people-oriented, taking people, families, families and enterprises as the basic units, and providing a full range of wealth planning services from a holistic perspective. According to reports,The bank has expanded its service scope through the innovative capital market model, covering entrepreneurs and the enterprises and families behind them, and the service content has expanded from retail financial and non-financial value-added services to a comprehensive and one-stop "personal enterprise" integrated service.
Dai Xuxian said: "We will make full use of our own resources, improve our professional skills, integrate the service system, and build a private banking brand with unique IB characteristics." "It should be noted that the integration of "people and enterprises" has very high requirements for public-private linkage. Tan Yan of Boston Consulting Group pointed out that with the transformation of China's economic momentum, the incremental demand to serve entrepreneurs with new drivers has become an indispensable part of private banking business, especially the linkage with capital market services. As a result, the entire wealth management institution's mechanisms, products, services and business models need to be adjusted accordingly.
By setting up a public-private linkage team, optimizing the business mechanism, and cooperating with the investment and financing services related to the capital market, IB Private Banking has achieved a service experience of "one-point access and group response". Dai Xuxian said: "Since the official approval of the opening of our private banking franchise last year, we have given full play to the advantages of group operation, integrated the business resources of investment banks, commercial banks and private banks, deepened the 'regional + industry' operation, and continued to promote the integration of public and private operations. ”
The bank has launched the family wealth management brand "Xingcheng Shijia", which provides comprehensive financial service solutions for business owners, including innovative family trusts, insurance trusts, special account business for asset allocation, and four value-added services: health management, elite education, worry-free travel, and quality of life。In addition, through the multi-faceted layout in the fields of merger and acquisition financing, private placement support, pledge, employee stock ownership plan, restricted shares, market value management, PE equity products, etc., it can better meet the diversified needs of entrepreneurs, families and business operations.
Digital empowerment is another key measure for IB's private banking upgrade。In recent years, the bank has comprehensively promoted digital transformation and improved the intelligent, platform-based and scenario-based level of digital wealth planning services. By upgrading the private banking business management system, integrating data from corporate finance and retail-related systems, building a public-private integrated customer database, and introducing artificial intelligence analysis, we can create a dynamic private bank customer diversified label portrait and provide underlying data support for comprehensive financial solutions.
In terms of digital operation, the bank has realized hierarchical and classified customer operation and full life cycle management through the method of "planning customer journey, clarifying growth routes, formulating standard services, and strengthening operational support", accurately matching personalized products and services according to customer portraits, promoting the construction of customer data interconnection, and significantly improving customer fine management capabilities and service levels.
Layout upgrade: Family offices meet the needs of customers in an all-round way
In the fierce market competition, how to acquire and retain customers and effectively transform customer value is the core difficulty faced by private banks. From the perspective of service experience, accurately capturing and meeting the needs of customers at different stages of life is an important part of problem solving.
For example, inheritance, as the first generation of entrepreneurs in the early stage of reform and opening up entered their twilight years, the peak period of wealth "exchange" is approaching. According to the research of Huiyu Global Family Think Tank, from wealth preservation and appreciation to preparing for the next generation;From seeking a full range of butler services to segregating risks between the business and the family estate;From strengthening family risk management to establishing family governance mechanisms, these are all real issues that plague this group.
Dai Xuxian said that the inheritance across cycles and generations is a systematic project involving both wealth and the cultivation of first-class people, as well as entrepreneurship, family values and cultural inheritance, which cannot be solved by a single service. To this end,IB Private Banking has upgraded from focusing on "past and present" to laying out "future", and through the family wealth management brand "Xingcheng Shijia", it focuses on the four major needs of customers: risk isolation, business sustainability, family wealth stability and personalized inheritance, and provides comprehensive, professional, customized and sustainable services.
Among them, the family office established in 2015 (the brand trademark of "Xingcheng Shijia" was registered separately in 2019) aims at the long-term development of family assets and wealth inheritance, takes the family trust as the carrier, integrates legal, tax, insurance, and multi-party resources to form an expert advisory group, and relies on IB's group service capabilities and strong asset management capabilities to provide high-net-worth families with a wide range of services covering investment management, asset allocation, risk diagnosis and isolation, wealth protection and inheritance, corporate governance, and A full range of wealth management services for charity and public welfare.
Fan Xiaoman, Chairman and Chief Family Advisor of Huiyu Global Family Think Tank, pointed out that more and more high-net-worth families now rely on professionals to guide their wealth management, and family office service providers include both vertical service providers and financial institutions, and families will compare the cases and comprehensive experience of different institutions. Among them,The trust and reputation of the brand includes the implementation of service capabilities, and whether the family customer is the main core starting point.
With this reference, it is not difficult to find that in the process of serving customers in the family office of "Xingcheng Family".IB Private Banking always puts the interests of customers first and provides them with customized solutions, which firmly grasps the core of trust and lays a solid foundation for building and maintaining long-term customer relationships.
In view of the fact that the most urgent demand of high-net-worth individuals for family offices is 'top-level design', we are stepping up efforts to establish a family office ecosystem with private behavior as the core, and provide real family office level customers with an integrated platform for investment and financing, financial and non-financial integration, and domestic and overseas business integration. Dai Xuxian said that the bank will further integrate the group's internal and external investment banks, trusts, brokers, industries, private equity, legal and tax consulting institutions, overseas branches, high-end value-added service platforms, business schools and other partners to jointly expand and maintain customers, so that the "Xingcheng Family" family office has become a long-term comprehensive account for high-net-worth customers.
It is worth mentioning that the private banking of IB, which was established in April 2011, has gone through 12 years of spring and autumn years, and has won many important awards from authoritative institutions at home and abroad, such as The Banker and PWM magazines under the Financial Times Group, Asiamoney under Euromoney, etc., for its tenacious dedication and outstanding performance in many fields.
Conclusion
In the midst of "great changes unseen in a century", despite the changing times and the environment, the original intention of IB Private Bank to build a "boutique private bank" with warmth remains unchangedIn the future, we will continue to grow in the ever-changing market test, explore and innovate in the integration of cross-field resources, and help customers' wealth and family foundation to be long-lasting.