A Comparative Analysis Of Private Banking Between China And Europe

The topic of this paper is the comparison of private banking in China and Europe,where the European private banking system,as a whole,will be taken as mean of comparison for China.Private banking has been analyzed on the prospective of a single aspect or just to study what the service lacks of.The difference relies in this part.This study will look at various aspects will be analyzed,both from the customer and the service side,as well as the regulatory body importance,influence and measure taken by it,giving a global perspective of the industry.Various factors will show the difference of the aspects afore mentioned and these features will be compared,subsequently leading to the answers for the questions posed.In order to analyze the two systems,financial marketing strategies will be used.The key of the answers might lie in the development.It is therefore necessarily to begin with the origin of the industry.Due to the fact that is a comparative study,the substantial development will be analyzed on both sides of the topic from the beginning.This is a key point that will introduce to the first difference.In fact,while in Europe private banking has developed throughout the centuries,China has seen the rising of this banking industry just in this millennium.Because of its long presence in the European banking industry,private bankers in Europe faced different problems and found solutions for improvements.The same cannot be stated for the Chinese counterpart.In fact,even though the ability of Chinese bankers in developing this type of business at such a fast pace can be admirable,the system still presents some lacks on different sides.Being a topic of great interest,scholars and academics have conducted researches on private banking in Europe and China,from different perspectives.In China,the recent development shown fast improvements and a rapid growth,which still presents some inadequacies.This assertion particularly refers to the supply and the differentiation of product side.In the past,especially Chinese scholars,have argued weather or not the technical preparation of Chinese private bankers was sufficient to meet the constant increasing needs of the clients.In more recent reports,there is evidence that some improvements have been made.A common feature for both parties is customer retention.This aspect involves the two system for many reasons,above all the type of service given and the fight for competition.Service includes not only the differentiation of products,but also the relationship that managers can establish with the customers.This is one of the focal points for what concerns customer retention,since it is one of the key to battle competition.Strictly related with the service given and the product range,is the customer demand.During the years the variety of customers has seen changes both on income and age.According to the findings,past clients used to be wealthy families in need for different investment solutions for their assets.Nowadays,it has been observed that,in virtue of higher education background,clients who were capable to accumulate their wealth are in need of private banking services as well.Moreover,a part of new customers belongs to the new generation,that is people whose age does not reach 50 years old.These two characteristics are influential in the type of investment decisions.As widely known,services offered by private banking are highly profitable in the long run.Therefore,is not surprising that different financial institutions,along with private wealth manager,and not entered the market.This created new competitors for private banks in Europe and China.On the Chinese prospective,this competition is exacerbated from the presence of European private banks branches in China.As a matter of fact,Chinese private banks have to face national and foreign competitors.On the contrary,Europe has a long tradition of affiliated branches all over the continent which do not constitute a foreign competitor for the continent itself.The above mentioned situation,in accordance with other factors created a different environment in which private banking evolved in a distinctive way.To have a clear picture,which can improve the understanding of these two separate evolutions,a financial marketing analysis of the external and internal environment is necessary.In the meantime,this analysis will bring to the study and the different measures applied by the regulatory body,in order to protect the clients as well as the banks.In conclusion,the comparison will bring to a clear picture of the system and some potential outcome for the Chinese private banking.We will see which possible solution could be found for the Chinese industry and what are the actual problems that need a deeper investigation.