Study On Risk Management Of Private Banking Business Of AB Bank

80% of the wealth is held by 20% of people in our society. The birth of the private banking business which serves for the 20% richest people is the special need of social development. A majority of private banking business was operated by the commercial banks in China. The private banking business operation needs not only the higher ability of wealth management, but also the ability of personal ordering. And the most important, is risk management.Private banking is a recent development, business innovation, product innovation and process innovation makes relevant risk involve a wide range and be easily related to each other. As a result, risk management in private banking area is much more complicated. You need to analyse and judge the risk type and original cause of business. Risk management in private banking area is different from traditional commercial business, because rhe main risk type of private banking is reputation risk, compliance risk and operating risk, which are more difficult to quantify. As a result, control in advance seems more significant.Risks of private banking business is mainly from two aspects:Firs is the risk of investment products. Similar to traditional commercial business, private banking products involves funds, securities, insurance and the real economy. However, these products are more complex in the design and structure, and put forward higher requirements in risk management. Second is the risk of individual. From the point of different business types, credit risk and market risk is dominant in the investment banking, company business and trading business, while operating risk is leading in the wealth management, agent business and retail business. It is not difficult to find that operating risk is the leading factor in private banking business. The fact of private banking business values customer relationship management also contributes to the status of operating risk. Of course, risk management of private banking business should be included in the unified risk management system of traditional commercial banking business as more as possible.The paper discusses the current situation of the development of the private banking business and risk types faced. Based on this, the author starts from the various kinds of business, especially customer access, customer relationship management, product sales and put forward specific coping strategy. After the analysis, I propose several items to improve and perfect private banking risk management, including improving the secrecy system, establish a sound internal control etc.In the past, research on risk management of private banking business starts from the type of risk, such as reputation risk, operating risk, credit risk, market risk, and discuss them respectively. The innovation of this paper is the new starting point, that is the procedure and the segment of specific business. The whole paper is based on the empirical study of one state-owned commercial bank and specially emphasize problems of the client access and product marketing. I believe this paper will give both banks and other financial institution some reference on risk management of private banking business.