Yimei Li, CEO, China Asset Management, a panellist at the WFE's recent Fostering Growth in Global Capital Markets symposium in China, writes about how FinTech is changing the finance industry in China.
The second panel at the event looked at FinTech, and discussed how applications such as AI and the cloud can be harnessed by FMIs. Please could you tell us where the FinTech market is in China, and how these applications are disrupting financial markets regionally?
China is now regarded as one of the largest and most promising FinTech markets. Over the last five years, FinTech has been developing rapidly in China, especially in digital payments, and we should expect financial institutions in China to allocate more resources into FinTech development and seek to cooperate with FinTech companies.
Big data, artificial intelligence (AI) , blockchain, and cloud computing are the top issues in China. Plenty of areas in the Chinese financial market have been disrupted with the development and application of these technologies; this includes commercial banking, investment and asset management, regulation, transfer and payments, market infrastructures, and many more.
Big data has been widely used in the financial industry, including banking, investment, and securities, but needs industry standardisation. AI has revolutionised investment advisory businesses. Regulatory activities are also expected to undergo significant disruption as Regtechs are being implemented - provided that the balance between FinTech development and financial risk control can be achieved. Blockchain is now not just a conceptual word and is beginning to be applied to applications in settlement, auditing, trading and risk management.
How is your business helping to foster growth in both global, and Chinese, capital markets?
The mutual fund business has been developing rapidly in China. In Q1 2018, assets under management in the Chinese mutual fund industry reached 12.37 trillion in RMB.
As a leading asset manager in China, the China Asset Management Company (ChinaAMC) is also one of the largest mutual fund companies. We serve individual and institutional investors domestically and internationally. Our product offering covers equity, fixed income, and quantitative strategies. Our current client base comprises more than 40,000 institutional clients and over 49 million retail investors, as of 31 December 2017.
In the early days of Chinese capital market development, participants were mainly individual investors. Acting as institutional investors, we fostered the gradual development of the Chinese financial markets by improving its structure, providing stability, and guidance. Our investment philosophy’s focus on fundamental analysis and long-term investment is also aligned with the long-term sustainability of the Chinese financial markets.
ChinaAMC’s vision is to become a globally influential asset management company, and we have made great efforts towards this goal. Since our establishment in 1998, ChinaAMC has maintained a wide network of global business partners and clients, and we became one of the first Chinese fund companies to serve global institutional investors in 2004. Our institutional clients include central banks, sovereign wealth funds, government pensions, asset management companies, and commercial banks. ChinaAMC is the first full-service fund management company in China to sign the UNPRI (United Nations’ Principles for Responsible Investment) and we have also begun integrating Environmental, Social and Governance (ESG) considerations into our investment process.