HSBC ready to link mainland and Hong Kong customers to new banking opportunities in Greater Bay Area

[Sponsored article]

Global banks looking to capture opportunities within the fast-growing markets of the Guangdong-Hong Kong-Macau Greater Bay Area (GBA) got a huge boost with the launch of the framework for Wealth Management Connect, a pilot scheme for cross-border investments. The programme is expected to be fully rolled out as soon as regulators give the go-ahead.

The scheme represents a major breakthrough toward frictionless, cross-border banking throughout the GBA by allowing mainland-based residents to invest in eligible investment products distributed by banks in Hong Kong and Macau. According to a 2021 survey by HSBC and the Nielsen Company (Hong Kong), 82 per cent of mainland investors in the GBA said they plan to invest in Hong Kong via the new scheme.

“This represents really strong opportunities for banks in Hong Kong,” says Maggie Ng, head of wealth and personal banking at HSBC Hong Kong. “We see tremendous opportunities for us to capture, and we hope to help this group of clients to achieve balanced portfolios and reach their investment objectives.”

A market worth trillions of yuan

The GBA represents one of the world’s most dynamic economic regions. With a population of over 72 million and a combined GDP of US$1.6 trillion – equivalent to 12 per cent of China’s total GDP – the region will play a central role in China’s future development plans.

Of particular interest to financial institutions will be the region’s large and growing affluent class. Research from Deloitte estimates that there are 450,000 high-net-worth families in the Greater Bay Area with investible assets worth at least 2.7 trillion yuan (US$417.29 billion).

Mainland Chinese clients may have a number of challenges investing overseas, with the first being limits on outbound investments, Ng notes. “Secondly, they don’t necessarily have a full understanding of international portfolios and international markets. Wealth Management Connect creates a really good opportunity to solve these two pain points.”

As one of the world’s largest banking and financial services organisations, which also has a long-established presence in the GBA, HSBC is well-positioned to support and promote this demand for quality cross-border banking services. HSBC’s product portfolio can provide solutions tailored to the different risk appetites or investment objectives of GBA clients.

“The challenge is about whether you can develop the right personalised customer solutions for customers,” says Brian Hui, head of customer propositions, international, and marketing, wealth and personal banking at HSBC Hong Kong. “And with HSBC’s capabilities in commercial banking, retail banking, private banking and global banking, we believe we are able to weave all of them together to offer the right solutions for our customers.”

Hui says HSBC is not only able to lean into its 156-year legacy of doing business in the region, but it can also rely on its insights into the current needs and habits of GBA customers.

“We need to understand their customer needs, their consumption behaviour, in terms of their money flow, their daily habits – all their financial management needs,” he says.

“We’ve been doing business with our mainland China and Hong Kong customers for many years, and have a positive legacy of data accumulation, which we can use to estimate our customer needs. And because we have that data, it’s relatively easier for us to develop the right solutions for our customers.”

Investing in a connected future

HSBC is underscoring its commitment to the GBA with a series of investments, including the building of a 16,000-square-metre (172,200-square-foot) global training centre based in Guangzhou, which is expected to open by 2024.

“I’m very excited about these GBA opportunities, because for us there’s a big population, and we are waiting to serve their investment needs,” Ng says. “At the same time, I think it can open up a lot of job opportunities. Apart from HSBC putting aside HK$8 million (US$1.03 million) for the first HSBC Greater Bay Area (Hong Kong) Scholarship, which was launched to financially support up to 100 Hong Kong undergraduate students looking to eventually work in the region, we have also opened up over 100 new jobs focusing on the GBA area.”

The future for the GBA is bright, with total GDP expected to reach US$4.6 trillion by 2030. That would exceed the GDP of other city clusters around the globe, such as the San Francisco Bay Area, the New York City metropolitan area, and the greater Tokyo Bay.

At the same time, integration between Hong Kong and the various cities and regions of the GBA is expected to deepen. It is estimated that as many as 500,000 Hong Kong residents already live in the GBA’s mainland locations, the majority being retirees. However, the Hong Kong government has introduced a number of schemes and subsidies aimed at helping the younger generation study, work and start businesses in the mainland cities of the GBA.

As the largest bank in Hong Kong and the largest international bank in the GBA, HSBC is ready to play its part in serving a more integrated and connected region.

“The GBA represents very strong integration opportunities,” Ng says. “We are looking at two strong economies collaborating together, and financial investment will help yield economic growth.”

Hui is equally positive. “[Customer needs] in the GBA are all about faster account opening, better retirement planning, better financial planning, better wealth management – all these kinds of international needs,” he says.

“We believe HSBC Hong Kong and HSBC China as a mutual corridor can offer a huge opportunity for the GBA customer.”