REGIONAL FOCUS: CHINA
Present-day view from Hong Kong office over the harbour
Turning to Chinese corporates, when Shanghai-headquartered fintech XTransfer needed support with cross-border collection and foreign exchange (FX) on behalf of its Chinese exporting SMEs, Deutsche Bank stepped in with a COBO and FX solution. In addition, when LianLian Global, a
leading international payment solution provider based in Hangzhou, needed support in helping Vietnamese e-commerce merchants to grow their business globally, Deutsche Bank solved the problem with a PSP collection and FX solution.
Custody and capital markets One example of this is the provision of custody services from a local perspective. Deutsche Bank is one of only three foreign banks to have obtained a local fund custody licence – something of a milestone – receiving it from the China Securities Regulatory Commission in late
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2020. As China’s population has become wealthier, and domestic investors seek asset diversification including overseas asset classes, the ability to meet local demand for custody services is key to being part of China’s ongoing growth story. Custody is a platform business in China and is difficult to do without the ability to allocate portfolios across multiple markets covered by the bank’s network. Population demographics and wealth creation in China have led not only to domestic advances in the financial instruments available, but also the knock-on effect of attracting more foreign investment to meet the needs of a growing and eager consumer base. “We have a rising number of high-net-worth individuals and more fund managers are emerging that serve these clients – rather than just the traditional houses. The licence is essential to meet these needs,” explains Chao.
Domestic investment behaviour is also
evolving. “What’s becoming apparent is the massive shift in interest away from China’s traditional domestic saving method,” adds Chao. “Where the average household traditionally used to put between 30% and 40% of its income into savings accounts, in the past few years people have been increasingly looking at asset diversification as a means of supplementing the returns that banks are providing.”
Merchant and FX solutions For 150 years, corporate treasury clients were concerned with three main objectives: saving costs, making funds available and getting timely financing. Huang reflects on how the needs of MNCs have changed during his 20-year tenure in the industry. “These three aspects are still important but nowadays, the digitalisation of treasury is growing in popularity and, more often
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