Study On The Transformation Of Commercial Banks’ Wealth Management Business Under The New Regulation On Capital Management

The new regulations on asset management are not only a basic requirement of government regulatory departments for preventing and resolving major financial risks,but also a long-term driving force for commercial banks to move from extensive management to refined management,strengthen risk prevention in wealth management business,and force banks to transform into differentiated competition.The core of the regulations is to eliminate the rigidity of current payoffs in the industry,transform financial institutions into net worth management,and guide the asset management industry back to the core of "client-oriented wealth management".Therefore,the transformation of wealth management business for all commercial banks is an issue that must be faced.This article offers a systematic analysis of the wealth management business of the Chengdu branch of China Merchants Bank in the context of the new regulations on asset management.The Chengdu branch has progressively innovated its wealth management business and improved its product types and structures to establish a more diversified wealth management product system.Since the release of the new regulations on April 27,2018 until the end of the transition period in 2020,the Chengdu branch has made targeted adjustments to its existing wealth management business,focused on enhancing the transformation of the wealth management business and reflecting this in the following ways: increasing investment,adding net worth products,optimizing asset management structures,overcoming transformation barriers,controlling debt ratios,reducing guaranteed wealth management products,integrating technology into finance,and reducing cost risks.To evaluate the effectiveness of these transformations of the Chengdu branch’s wealth management business,this article compares and analyzes the performance of the Agricultural Bank of China,China Merchants Bank,and the Rural Commercial Bank in Chengdu based on their financial data.This comparison includes a longitudinal comparison,which considers the financial data of China Merchants Bank’s Chengdu branch from 2016 to 2022 and uses the balanced scorecard approach to quantitatively evaluate 14 qualitative performance indicators.The results show that China Merchants Bank’s Chengdu branch’s wealth management performance has increased steadily since the execution of the new regulations in 2018 and reached its maximum value of 0.2824 in 2021,indicating the successful transformation of its wealth management business.However,in 2022,the performance of the wealth management business dropped somewhat,indicating that there were still challenges facing the bank’s transformation.To address these challenges,this article collected survey data and found that the Chengdu branch needs to improve its product competitiveness in wealth management,customer relationship management,employee training and incentive mechanisms,and internal operational management.Four optimization measures are proposed: firstly,to diversify the bank’s wealth management product types,including taking advantage of the innovation benefits of net worth products and increasing the proportion of standardized assets and equity assets.Secondly,to further improve the customer relationship maintenance system for wealth management,including increasing customer awareness of net worth products and managing customer churn.Third,to strengthen the cultivation and incentives for wealth management talents,such as building a talent development and education mechanism and optimizing the employee compensation system.Finally,to establish the core competitiveness of wealth management business,such as optimizing the risk management level of the business and conducting digital layered marketing.Implementing these measures can enable the Chengdu branch of China Merchants Bank to achieve a benign transformation of its wealth management business under the pressure of asset management regulations and improve its market competitiveness and profit-making abilities.In summary,this article has summarized the problems existing in the personal wealth management business transformation of the Chengdu branch of China Merchants Bank,and analyzed the main measures for its transformation.This provides theoretical support for China Merchants Bank’s Chengdu branch to develop its wealth management business under the new regulations on asset management,and can also provide a reference for other banks undergoing a transformation of their wealth management business.