Report

China’s Private Banking Industry: Back to Basics

The sixth China Merchants Bank-Bain China Private Wealth Report tracks how the investment mentality, behavior and segmentation of HNWIs have changed after the recent market turmoil.

By Jennifer Zeng and John Ott

Published on 九月 20, 2019
min read


A decade has gone by since China Merchants Bank (CMB) first teamed with Bain & Company in 2009 to release the inaugural China Private Wealth Report. Over this period, we have tracked major changes in China’s wealth management industry and have gone through several rounds of market fluctuations, along with the country’s high-net-worth individuals (HNWIs) and wealth management institutions. Our uninterrupted market tracking, data analysis, surveys and interviews continue to generate unique and proprietary insights into this sector. Over the past two years, the global political and economic landscape has been experiencing significant changes, and international financial markets have been rocked by turbulence. At the same time, China has entered a critical phase in pressing ahead with supply-side structural economic reforms. In light of these internal and external developments, the Chinese economy is experiencing tremendous and unprecedented challenges. The sixth CMB-Bain China Private Wealth Report, therefore, comes at a crucial time. The report tracks how the investment mentality, behavior and segmentation of HNWIs have changed after the recent market turmoil—and shares insights into how they may evolve in the future. By visiting and interviewing customers in major Chinese cities, including Beijing, Shanghai, Hangzhou, Shenzhen, Guangzhou, Chongqing and Hong Kong, and analyzing the results of more than 3,000 questionnaires completed by HNWIs, we observed that HNWIs have become much more conservative and risk averse in their investment strategies, demonstrating a stronger desire for capital preservation and long-term wealth accumulation. They have a clearer understanding of various asset classes and their associated risks than they ever did before. They are no longer blindly chasing hot investment products or ideas, and they are making more mature asset-allocation decisions. During the recent market turmoil, HNWIs have also been relying more on private wealth management services offered by banks. Finally, amid the global economic uncertainty, and encouraged by policy initiatives in China, HNWIs have been shifting the focus of their investments back to China. Over the past two years, tighter regulation following the recent market turmoil has been a source of both substantial threats and strong opportunities for Chinese wealth managers. While the weakest have been forced out of the market, stronger institutions have been able to thrive by taking advantage of those opportunities. Amid the intensifying competition, all wealth managers in China ought to respond by working hard to improve their customer experience through various means, including technological innovation, sophisticated product differentiation, enhanced customer relationship management and a more comprehensive offering of services. To cope with an increasingly complicated business and investment environment in the future, financial institutions that serve HNWIs will need to leverage their expertise fully and respond to their customers’ needs to withstand the test of time. Download the Report (PDF)

A decade has gone by since China Merchants Bank (CMB) first teamed with Bain & Company in 2009 to release the inaugural China Private Wealth Report. Over this period, we have tracked major changes in China’s wealth management industry and have gone through several rounds of market fluctuations, along with the country’s high-net-worth individuals (HNWIs) and wealth management institutions. Our uninterrupted market tracking, data analysis, surveys and interviews continue to generate unique and proprietary insights into this sector. Over the past two years, the global political and economic landscape has been experiencing significant changes, and international financial markets have been rocked by turbulence. At the same time, China has entered a critical phase in pressing ahead with supply-side structural economic reforms. In light of these internal and external developments, the Chinese economy is experiencing tremendous and unprecedented challenges.

The sixth CMB-Bain China Private Wealth Report, therefore, comes at a crucial time. The report tracks how the investment mentality, behavior and segmentation of HNWIs have changed after the recent market turmoil—and shares insights into how they may evolve in the future.

By visiting and interviewing customers in major Chinese cities, including Beijing, Shanghai, Hangzhou, Shenzhen, Guangzhou, Chongqing and Hong Kong, and analyzing the results of more than 3,000 questionnaires completed by HNWIs, we observed that HNWIs have become much more conservative and risk averse in their investment strategies, demonstrating a stronger desire for capital preservation and long-term wealth accumulation. They have a clearer understanding of various asset classes and their associated risks than they ever did before. They are no longer blindly chasing hot investment products or ideas, and they are making more mature asset-allocation decisions. During the recent market turmoil, HNWIs have also been relying more on private wealth management services offered by banks. Finally, amid the global economic uncertainty, and encouraged by policy initiatives in China, HNWIs have been shifting the focus of their investments back to China.

Over the past two years, tighter regulation following the recent market turmoil has been a source of both substantial threats and strong opportunities for Chinese wealth managers. While the weakest have been forced out of the market, stronger institutions have been able to thrive by taking advantage of those opportunities. Amid the intensifying competition, all wealth managers in China ought to respond by working hard to improve their customer experience through various means, including technological innovation, sophisticated product differentiation, enhanced customer relationship management and a more comprehensive offering of services.

To cope with an increasingly complicated business and investment environment in the future, financial institutions that serve HNWIs will need to leverage their expertise fully and respond to their customers’ needs to withstand the test of time.

Download the Report (PDF)