
Publication History
Submitted: April 09, 2023
Accepted: April 20, 2023
Published: May 01, 2023
Identification
D-0053
Citation
Ferooq Ahmad (2023). A review on Equality Management of bank financial product. Dinkum Journal of Economics and Managerial Innovations, 2(05):305-310.
Copyright
© 2023 DJEMI. All rights reserved
305-310
A review on equality management of bank financial productReview Article
Ferooq Ahmad 1*
- Institute of Business Management, Karachi Pakistan; mrferooq_ahmad @gmail.com
* Correspondence: mrferooq_ahmad @gmail.com
Abstract: The term “unit net value” pertains to the valuation of the net equity of wealth management products, which is determined by deducting the fair value of assets and liabilities. This metric serves as a means to assess the present value and risk associated with wealth management products. The system aims to standardize management requirements, enhance public risk education to enhance customer awareness, and enhance the information disclosure system. However, a significant disparity remains between the level of transparency in disclosing product information and the issuance of non-net worth wealth management products, as well as the absence of performance comparison benchmarks. This review aims to analyze the management of equality in Bank financial products, focusing on the perspective of Management Strategy. Based on the statistical data provided by Standard, it is observed that as of the conclusion of the month, the proportion of products exhibiting disclosed product balances in regular reports constituted only a percentage of the total net worth. The ability to successfully manage product deviation within a specified range aligns with the anticipated outcomes of investors. Small and medium-sized banks demonstrate a strong commitment to fulfilling the primary objective of catering to the real economy. They possess a comprehensive understanding of market demand and effectively leverage their resource allocations to delineate crucial product categories. The manager is advised to fully utilize the functions of the custody institution in the process of investment decision-making and asset and liability measurement. It is recommended that the asset and liability measurement plan be executed only after thorough consultation and mutual agreement with the custody institution. Furthermore, bank wealth management plays a significant role in facilitating indirect financing by effectively utilizing capital and determining whether investors ultimately assume direct risk. Net worth wealth management products have experienced substantial growth and emerged as the dominant force in the wealth product market. In order to foster the consistent growth of the bank wealth management product market, it is imperative for regulators, banking institutions, investors, and other stakeholders to collaborate effectively.
Keywords: bank wealth management; net product worth; management strategy
- INTRODUCTION
The term “unit net value” pertains to the valuation of the net equity of wealth management products, which is determined by deducting the fair value of assets and liabilities. [1] This metric serves as a tool for assessing the present value and risk associated with wealth management products. Investors typically engage in subscription and redemption activities based on the net value of their investments, while distributions are typically made upon early termination. In order to facilitate the advancement of bank wealth management net value, banking financial institutions should prioritize cash management products as a primary avenue for transformation in the near future. Additionally, they should proactively allocate resources towards net value products in the long run, promptly establish investment research teams, and actively prepare for the establishment of wealth management subsidiaries. Concurrently, regulatory authorities should enhance fundamental accounting practices. The system implements standardized management requirements, enhances public risk education to enhance customer awareness, and enhances the information disclosure system [4].
- ANALYSIS OF EQUALITY OF BANK WEALTH MANAGEMENT PRODUCTS
The present operational condition of the bank’s wealth management division is characterized by the simultaneous existence of both new and existing products and assets. Additionally, the asset management activities of the bank’s parent institution and the operations of its wealth management subsidiaries are conducted concurrently. While current regulations may still permit the operation of traditional businesses, it is imperative that the market share of outdated products diminishes further. In accordance with regulatory mandates, it is imperative to remove all outdated products that fail to comply with the latest regulations from the market prior to the conclusion of the current calendar year. There remains less than six months until the conclusion of the transition period. Nevertheless, in an effort to mitigate the financial disparity resulting from the rapid withdrawal of outdated products and the inadequate availability of new ones, numerous banks continue to introduce non-net-worth financial instruments [6]. Based on the findings obtained from the China Financial Network, it has been determined that as of the specified date (year, month, and day), the available financial products exclusively pertain to those without net worth. The entities responsible for issuing these products encompass state-owned banks, joint-stock banks, and select city commercial banks, including but not limited to China Construction Bank, Huaxia Bank, and Bank of Jilin [7]. There is still room for improvement in terms of transparency in information disclosure following the transformation of net worth. However, it is worth noting that there has been a notable enhancement in the disclosure of information by banks. At the conclusion of the fiscal year, the percentage of newly issued net worth products that have disclosed their net worth data amounted to 10%. However, when compared to funds and international banks, the disclosed [8]. There remains a substantial disparity in both the punctuality and comprehensiveness of the matter at hand. The phenomenon is primarily observed through the following two dimensions: Firstly, with regards to the frequency of disclosure, certain institutions have yet to establish a systematic approach for consistently publishing reports pertaining to their products. Additionally, there are instances where the disclosure of net worth data for certain products does not align with the prescribed frequency of openness [9]. Several products from the “Zhaozhi” and “Zhaorui” series have not yet made their quarterly reports publicly available on the bank’s official website. Furthermore, with regards to the content of disclosure, the disclosure of product balances exhibits a lack of optimism. Based on the statistical data provided by Puyi Standard, it is observed that by the conclusion of the month, the proportion of products with disclosed product balances in regular reports constituted only a certain percentage of the overall net worth products. Additionally, the asset data pertaining to the top ten holdings were made available [10]. Presently, state-owned financial institutions exhibit a tendency to disclose such information under optimal circumstances, with the proportion of disclosed products amounting to a mere 10%. The objective of this study is to examine the net value management strategies employed by banks in their wealth management products, with the aim of enhancing industry standardization in terms of wealth management net value and information disclosure [11]. The obligation to disclose information regarding wealth management products is incumbent upon the managers of such products, whether they are affiliated with banks, wealth management companies, or other financial institutions. The safeguarding of investors’ rights and interests, known as information disclosure, is a crucial component of investor suitability management and serves as a significant assurance for maintaining the accuracy of net worth [12]. In accordance with the stipulations of the newly implemented wealth management regulations, it is imperative for wealth management product managers to enhance the transparency of wealth management information. This can be achieved through various channels, including the official website of the bank, mobile terminals, and the China wealth management website [13]. To ensure accuracy and clarity in describing relevant valuation methods, it is advisable to provide clarification on numerical elements, disclosure frequency, channels, and penetration disclosure requirements pertaining to financial products and financial information disclosure. In adherence to the standardized guidelines for information disclosure, it is imperative for banks and wealth management firms to guarantee the coherence of dates and data while disseminating information across various platforms. There is a recommendation to enhance the function of the China Financial Network as a comprehensive information disclosure platform for the wealth management sector. This would enable investors to gain a better understanding of the existence of codes associated with wealth management products, allowing for verification and prevention of fraudulent activities. Additionally, it would facilitate convenient access to information for query and comparison purposes, thereby promoting transparency and accountability. Ultimately, this initiative aims to safeguard investor rights and ensure that both sellers and buyers fulfill their respective responsibilities [14]. A well-defined framework, comprehensive system support, and effective personnel management are imperative for the disclosure of net worth. Additionally, the system should be equipped to accommodate inquiries from customers. The implementation of reasonable and standardized financial net worth disclosure practices has the potential to enhance the recognition and effectiveness of net worth wealth management products [15]. Regulatory departments should effectively utilize their guiding function, proactively foster the culture of self-discipline within commercial banks, persistently enhance the financial literacy of investors, adopt comprehensive strategies, and implement multiple measures concurrently to establish a bank wealth management market that is characterized by transparency, standardization, and soundness [15]. Regulatory agencies ought to proactively promote the collaboration between commercial banks and relevant professional media in order to fully leverage their respective strengths. This collaboration should aim to enhance public awareness and comprehension of the genuine attributes of wealth management products in diverse forms. It is crucial for the public to embrace the notion of “buyer emptiness” and refrain from passively accepting wealth management products recommended by banks. Instead, individuals should be encouraged to actively scrutinize and compare various products, enabling them to make independent investment decisions. By fostering the development of rational investors, regulatory agencies can contribute to the sound growth of the wealth management market. Banking institutions ought to enhance their infrastructure and bolster their technological capabilities by upgrading their software and hardware systems. Banking institutions should adhere to regulatory requirements in a stringent manner. They should enhance the quality of disclosure reports by standardizing product disclosure indicators, such as net worth, income performance, investment strategies, operations, and underlying assets. Furthermore, they should disclose information pertaining to net worth and income in accordance with the frequency of product opening data. Another important aspect is the establishment of an investment research team. Developing one’s own investment and research skills is crucial in order to enhance the rationality and alignment of product design with market expectations. The objective is to efficiently manage product deviation within a specified range and strive to fulfill investor expectations [20]. The third aspect entails directing attention towards enhancing the prowess of financial technology. The objective is to engage in the recruitment and training of skilled individuals, as well as to foster innovation and advancement in financial investment, sales, management, and other operational systems. These endeavors aim to align with regulatory standards and cater to the specific demands of banks and investors [21]. By leveraging system construction, it is possible to devise novel approaches and frameworks for the promotion and marketing of products and services. The integration of online publicity and sales into the user experience introduces novel components, such as the provision of experience funds and experience time to investors. This facilitates their engagement with a wider range of investment markets and enhances their understanding of investment risks. Consequently, this initiative contributes to the advancement of investors’ knowledge and the overall development of the financial market [22]. It is imperative for small and medium-sized banks to effectively comprehend the primary objective of catering to the real economy, possess a comprehensive understanding of market demand, and strategically leverage their resource endowments to delineate crucial product categories. Every stage of development endeavors to identify and capitalize on opportunities that fall within its area of expertise [23]. The characteristics of customers can be classified based on various factors such as the minimum purchase amount, term, and risk preference of the product. This categorization helps in comprehending investor behavior and catering to the diverse investment requirements of different types of customers, including ordinary individuals, high-net-worth individuals, corporations, and interbank entities [24]. The objective is to actively advance the development of financial technology and utilize it in various aspects such as intelligent recommendations and customer group profiling. This will facilitate the creation of a comprehensive net-worth wealth management product system that caters to the entire life cycle of customers, thereby enhancing the range of available products. In the realm of product investment, a range of investment scopes and operating modes can be employed to cater to the diverse investment requirements of customers [25].Custodial institutions have been involved in the functioning of wealth management products, and there is a need to enhance their role as the entity accountable for net worth accounting. The recent regulations pertaining to financial management necessitate the implementation of “substantive independent trusteeship,” which serves to elucidate the obligations of trusteeship institutions at the institutional level [26]. In the course of wealth management product operations, it is imperative for custody institutions to diligently fulfill their responsibilities in areas such as independent custody, valuation, accounting, clearing, settlement, investment supervision, and information disclosure. Furthermore, it is essential to ensure comprehensive custody throughout the entire life cycle of these products. The manager is advised to effectively utilize the role of the custody institution in investment decisions and the assessment of assets and liabilities. Additionally, the implementation of the asset and liabilities measurement plan should be carried out after thorough consultation and agreement with the custody institution [29].The transformation of banks’ wealth management net worth and the phenomenon of “polarization” exhibit varying degrees of progress. There is a recommendation to enhance the establishment of wealth management teams and professionalism within banks (30). The primary objective is to enhance the competencies of management personnel in various areas such as research, product design, asset allocation, and risk management. Additionally, there is a focus on diversifying the range of net worth wealth management products to cater to the specific requirements of different customer segments [31]. The second objective entails effectively managing the entire product chain by aligning with the suitability requirements of investors, precisely discerning the investment objectives and risk preferences of customers, and enhancing investor education and promotion for net worth wealth management products [32]. The third step involves expediting the updating process of pertinent supporting systems in order to align with the altered operational logic following the net worth transformation. The purpose of developing a product risk management system is to establish a set of rules and regulations. The initial step involves the implementation of the system concept, followed by the standardization of business processes [33]. The second objective pertains to enhancing the process of identifying and evaluating risks associated with innovative products. The principles guiding product design should encompass simplicity, transparency, and effective risk management. Prior to its official launch, the product must undergo a comprehensive evaluation by various pertinent functional departments, including risk management, legal compliance, financial accounting management, and consumer protection. [34] Simultaneously, it is imperative for the products being released to align with their respective management level, risk control level, and information system support capabilities [35]. The third aspect entails placing greater emphasis on investor suitability management, prioritizing anti-fraud measures and investor protection specifically for individual clients, and implementing an emergency response mechanism. One crucial aspect is the implementation of scientific and rational approaches to effectively mitigate and manage risks associated with product operations [36]. The monitoring of risk deviation is conducted to maintain the stability of the product style, in accordance with the investment strategies and performance benchmarks established during the product design phase [37].
- CONCLUSIONS
Wealth management products play a crucial role in representing the competitiveness and brand image of bank asset management institutions, as they serve as intermediaries and business conduits between these institutions and investors. In the realm of wealth management products, the net value of assets allocated to wealth management is commonly referred to as net product value, product net asset value, or product total net value, among other terms. The term “it” pertains to the net asset value of a product, which is calculated by subtracting the product’s liabilities from its total asset value. Both assets and liabilities are assessed at their fair value. The direction of wealth management business transformation involves the promotion of challenging traditional payment expectations and the development of net worth wealth management products. In summary, it can be concluded that bank wealth management serves as the preferred avenue for Chinese individuals to effectively manage their assets and deposits. Inclusive finance is characterized by the presence of numerous issuers and participants. Furthermore, bank wealth management plays a significant role in facilitating indirect financing by effectively utilizing capital and determining whether investors ultimately assume direct risk. Net worth wealth management products have experienced substantial growth and emerged as the dominant force in the wealth product market. Nevertheless, a significant disparity persists in the transparency of product information disclosure, as well as the issuance of non-net-worth wealth management products and the absence of performance comparison benchmarks. One of the issues that can be identified is the presence of deficiencies in the education of individuals with regard to their reading abilities. In order to achieve this objective, it is imperative for regulators, banking institutions, investors, and other stakeholders to collaborate in order to facilitate the consistent growth of the bank wealth management product market.
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Publication History
Submitted: April 09, 2023
Accepted: April 20, 2023
Published: May 01, 2023
Identification
D-0053
Citation
Ferooq Ahmad (2023). A review on Equality Management of bank financial product. Dinkum Journal of Economics and Managerial Innovations, 2(05):305-310.
Copyright
© 2023 DJEMI. All rights reserved