Since its announcement in 2020, Hong Kong’s financial institutions have been anticipating the launch of the Wealth Management Connect Scheme. This collective drive aims to develop and establish the Greater Bay Area as a major economic and financial powerhouse, firmly integrate the region, and strengthen the internationalisation of RMB.
The Guangdong-Hong Kong-Macao Greater Bay Area (GBA) comprises the two Special Administrative Regions of Hong Kong and Macao, and the nine municipalities of Guangzhou, Shenzhen, Zhuhai, Foshan, Huizhou, Dongguan, Zhongshan, Jiangmen and Zhaoqing in Guangdong Province. Based on the latest figures provided by the Guangdong Province, the Hong Kong Special Administrative Region Government (SARG) and the Macao SARG, the total population in the GBA is over 86 million with a GDP of USD 1,668.8 billion in 2020.
Hong Kong stands to gain immediate access to a large and wealthy customer base from the Mainland. The GBA has a combined GDP larger than South Korea and Australia combined. Financial institutions need to be at the ready to scale their business and cement their positioning in being Asia’s leading banking hub. The city is already one of the world’s most advanced financial markets, and will become an important centre for offshore RMB.
Wealth Management Connect – Southbound and Northbound
The Wealth Management Connect between Hong Kong and Mainland China consists of the Southbound Scheme and the Northbound Scheme. Under the Southbound Scheme, eligible residents (as prescribed by the Mainland regulatory authorities) in the Mainland cities in the GBA can invest in wealth management products by banks in Hong Kong. View the list of participating banks from Hong Kong here. Under the Northbound Scheme, eligible residents in Hong Kong (including permanent and non-permanent residents with a valid Hong Kong ID) can invest in wealth management products by banks in the Mainland cities in the GBA. View the list of participating Mainland banks here.
Renewed Life Injected in the Hong Kong-Shanghai Stock Connect
The newly announced inclusion of exchange-traded funds (ETFs) by both Mainland and Hong Kong exchanges will also reaffirm the city’s role as a global financial hub and a bridge between China and the rest of the world. With the goal of facilitating mutual market access between the two regions, official implementation of the proposal will be ready by July 2022.
Eligible investors from the Mainland will gain access to selected ETFs, while offshore investors are also able to invest in China’s specific industries. According to the Hong Kong government, the northbound trading of stock connect has injected net capital inflows of 1,600 billion yuan into the mainland stock markets, while southbound trading has brought more than HK$2,300 billion into the Hong Kong market. Hong Kong Exchanges and Clearing (HKEX) said that for many investors ETFs are a “cost-efficient investment option and a popular choice for diversification”.
Are Financial Institutions in Hong Kong Ready?
The Hong Kong Monetary Authority (HKMA) announced that 19 banks in Hong Kong have been approved to provide Cross-boundary Wealth Management Connect services. Some eligible banks have assigned hundreds, if not thousands of staff to dedicate efforts into the scheme. Early responses have shown that both Hong Kongers and Mainlanders are interested in this cross-border scheme, but are financial institutions able to cope with the surge in wealth management demands?
Quantifeed is primed to help financial institutions to scale their wealth business in anticipation of wealth management growth via the scheme. Our technology enables financial institutions to increase each advisor’s efficiencies, helping them to service more customers. Our solutions offer powerful multi-instrument investment journeys for customers. The modular platform easily integrates with existing systems to supercharge wealth management propositions. Connect with investors on a personal application, increase advisor efficiencies, and scale to millions of eager investors from both sides of the region.
Looking for a digital touchpoint to engage your customers? View our Customer-Direct solution. Are your advisors ready for the influx of investors? Learn more about our Advisor-Led solution that helps advisors service more customers.
Reach out to us if you have a specific need for your business requirements. QEngine, our award-winning modular technology platform, can grow your wealth management business. We are ready to help financial institutions scale their business in anticipation of the Wealth Management Connect Scheme.