00:00You have a very unique position being a subsidiary of a Chinese bank here, and we just talked about, right, the amount of flows from the mainland coming for people starting to set up account and whatnot.
00:10How are you capturing that sort of inflow now?
00:13Yeah, hi Yvonne. In terms of wealth management, the business in Hong Kong actually last year is growing very fast.
00:21And for us, we are also very encouraged by the growth in the wealth management income with a 46% year-on-year growth.
00:31And behind that, the key driver is around the Chinese mainland customers coming to Hong Kong looking for offshore investment solutions.
00:40And with that, in particular, opening account, and we see a very strong flows into that.
00:48What we did is we launched an eight-minute account opening service for our customers.
00:53Eight minutes?
00:54Yeah. What they do is...
00:56That's as long as this interview is going to be.
00:58That's how quick it is.
01:00Basically, because the key pain points for mainland investors when they come to Hong Kong looking for offshore investment, the first thing they have to do is to open the bank accounts.
01:11Right.
01:11And that has been a challenge previously as well, and then queuing as well.
01:16And what we did is we put that solution into the mobile banking app.
01:21And with that, our customers, when they come to Hong Kong, they can use our mobile banking app to input all the information and authentication, and it will be complete in eight minutes.
01:30And after that, we also deck on a lot of different wealth management products onto the mobile banking app, and they can do it just digitally.
01:37What are the... I've always been curious about this.
01:40We've seen a lot of flows coming here, to your point.
01:42What are some of the most popular products that mainland, the affluent class, want to get here?
01:49Yeah, that's actually a lot of questions.
01:52A lot of people ask me the questions.
01:55I would say it really are very diverse needs, because probably I would...
02:01The customers can cater us probably into two groups.
02:05Okay.
02:05One group being the high net worth customers.
02:07So their demand for products, they are very knowledgeable.
02:11Okay.
02:11So they would look for more multi-asset class.
02:15Their needs are far more complex, different investment tools.
02:19The other group is being the mass affluent mainland Chinese investor.
02:23Okay.
02:24And most of them, they have very limited offshore investment experience.
02:29And to that, the Wealth Management Connect schemes is a very good starting point for them to invest in Hong Kong, invest in low and medium risk product.
02:40Like in the past years, probably time deposit is very popular.
02:44But as the interest rate is coming down, we are seeing the flows going to funds as well in the Wealth Management Connect schemes.
02:50Your client numbers have grown substantially.
02:54I think you nearly doubled, right?
02:5697%.
02:57Interesting enough, though, your AUM has only grown about 25%.
03:00Can you tell us what's going on there and how you address that gap?
03:04That's the number that we doubled is on our private banking customers.
03:09And then our AUM grown by 25%.
03:11And the reason is that because a lot of them are new customers.
03:14So they opened the account last year.
03:17And then they are looking into some of them, they have already offshore money, probably in other area.
03:24And then we are sharing our households and products.
03:28And that's why.
03:29But I would think that since they opened the account with us last year, I would think that this year we'll see a more decent growth and strong growth in our AUM.
03:37Do you have a specific target on AUM growth this year?
03:40Well, to our targets, at least 50% growth for the private banking side.
03:45Because the momentum and leveraging on our parent banks in terms of the demand and the flows that we are seeing are very confident in terms of the asset management.
03:55I was actually going to ask you that because what sets you apart to your point, right?
04:00You're trying to construction back.
04:02How do you, what is the unique selling point?
04:03Because we are, there's plenty of players and competitors here in Hong Kong, which is I think a good problem to have for the industry.
04:10But how do you, how do you grab the AUM, as you point out, sitting elsewhere?
04:14Yeah, first of all, Hong Kong, I would say the wealth management market has wide and depth as well.
04:21And for us, what we are doing is, first of all, leveraging on our parent banks in terms of like our operations and efficiencies and also technology development coming back to our strategic priority.
04:34One of that is scaling through digitization.
04:37So this is one.
04:38And the other is a lot of the experience, like the use of technology, AI, modeling.
04:44There are a lot of best practice that we can leverage from our parents' bank.
04:48And last but not the least is the customers.
04:51So through the discussions and also meeting customers in our mainland who need offshore investment solutions, then our Hong Kong arms comes into play.
05:02How do you plan on expanding the wealth business then?
05:05Do you plan on hiring more wealth managers, private bankers?
05:09Yeah, definitely we have to.
05:11Seeing the growth in the customer base at the speed.
05:15In the coming one, two years, roughly, we are planning to hire roughly hundreds of front lines, which include private bankers.
05:24And we also have branches in Hong Kong as well.
05:26Hundreds or hundreds?
05:27One hundred.
05:28One hundred, okay.
05:29Yeah.
05:29And including branches and also servicing staff.
05:33But to that point, I think apart from having RMs, the other observations is Chinese mainland investor, they demand speed.
05:44So that's why actually they would like everything to do it on a mobile banking app.
05:48And as a result, we are also double downed on our investments in mobile banking.
05:54For example, in the past, we have some principal protective products that can only be distributed at the branch network.
06:02Okay.
06:02And then we put them on mobile and the investment size is only one tenth.
06:07And then we can do it 24 hours a day.
06:10I think that's and even customer going back to mainland, they can still manage their finance through mobile banking.
06:16I think this is what we think even more important as we look into scaling the business.
06:22And that's a very fine balance because you have to, I guess, in some ways, right, make everything available online.
06:30But in some ways, you have to also protect against online fraud and all these sort of things.
06:36So how are you approaching that balance between convenience and AI too?
06:40I think you are head on in asking a very critical questions in terms of like risk medication, because I think, first of all, for our aims, I think for high net worth customers, we still maintain a very high level of specialists in serving them.
06:58But in terms of like online digitization, we have, for example, like fraud detection, limit control.
07:04And then we have a team to look into that actually on a daily basis and managing that.
07:08And it is a day-to-day job.
07:10And you have actually rightly highlighted that very critical points.
07:14We have one more question.
07:15I want to ask you about Hong Kong.
07:17The property market seems to show signs of recovery.
07:20What are your clients' demands now?
07:22Right now, do they see that or do you see that this property market is bottoming out now?
07:26And what does it tell you about what the bank's commercial real estate exposure should be?
07:30Yeah.
07:30What we hear from our clients, I do hear clients now, for example, looking into the property.
07:41For example, in Hong Kong, we have different talent schemes.
07:45In the past, probably they rent.
07:48And probably I do hear clients, they may be looking for it.
07:51And what we are doing right now is putting up more research.
07:54It really depends on their circumstances and how long they're going to stay here.
07:58And then more research and analysis.
08:01But we do see more interest.
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