2. China’s Onshore Dream
(Image: Aaron Greenwood via Unsplash)
Despite its size, the opportunity of offshore Chinese wealth is a mere fraction of Capgemini’s estimated $6.5 trillion pool from HNWIs. Still, foreign private banks and wealth managers have found little, if any, success in capitalizing on the market. Regulatory hurdles constraining the scope and scale of activities that foreign players are permitted to conduct have limited their ability to import many of the best capabilities where they have a competitive edge such as global asset management.
In contrast, Chinese banks sitting in Hong Kong are equipped with the blessing of an amassed network of branches in China with clients that are keen to explore international opportunities. With little to no cost of acquisition, they are likely the first banking touch point and are initially insulated from the competition driven by clients’ multi-banking tendencies.
Nonetheless, offshore wealth management tends not to occupy top priority amongst financial giants in China and gaining the blessing and commitment from senior management is oft-cited as the greatest hurdle to success.
