Ties between Hong Kong and mainland China's banking and finance industries are strengthening.
"It's not a question of dominance of one system over the other, but a matter of co-operation," notes Carrie Leung, chief executive officer, the Hong Kong Institute of Bankers (HKIB). Hong Kong's well-established and developed banking framework can assist the transfer of product knowledge and systems to the mainland for application.
"The number of local banks with a presence in China continues to increase, and they take with them the latest industry information and management skills," Ms Leung says.
Similarly, Chinese banks with a presence in Hong Kong have made their fair share of contribution to the exchange. "They have developed and bring into Hong Kong market unique products," she adds.
The HKIB acts as a bridge to facilitate an effective exchange of information and skills between the two regions. For example, the institute organises about 50 study tours to Hong Kong from the mainland every year. During these tours, visitors are introduced to local banking professionals and practices. "This month, the HKIB will join hands with Hong Kong Chamber of Commerce's Shanghai office for a study visit involving more than 30 Hong Kong banking and finance professionals," Ms Leung says.
Training and awards
Recent visits have fostered deeper mutual understanding within the industry across the regions, Ms Leung explains. In June this year, Liu Ming-kang, chairman of the China Banking Regulatory Commission, and Zhou Xiao-chuan, governor of the People's Bank of China, met with delegates from 14 banks in Hong Kong. Joseph Yam, vice president of the HKIB and chief executive of the Hong Kong Monetary Authority, and Peter Wong, president of the HKIB and executive director of HSBC Hong Kong and mainland China, led the Hong Kong group.
Discussions centred around training possibilities for bankers in China and the meeting was followed by a one-day HKIB training seminar on wealth management attended by over 200 mainland bankers. "This was a large-scale event," notes Ms Leung, adding that the HKIB's next project will be the establishment of a China Outstanding Financial Plan Proposal Award in which candidates will be judged solely on their financial planning proposals. This differs from the HKIB's Outstanding Financial Planner Awards, where candidates are required not only to submit proposals but also present comprehensive execution plans.
According to Ms Leung, the Outstanding Financial Planner Awards set the highest standards with respect to wealth management. The panel of judges is made up of representatives of the Hong Kong Monetary Authority, business heads from major banking institutions and university professors. "It's well worth the effort for the winners," she remarks.
Looking to the future
Nowadays, there are three million people working in the mainland's banking industry, compared to 85,000 in Hong Kong. "Although Hong Kong is regarded as a major financial centre because of its early development, mainland China is now witnessing rapid growth," Ms Leung notes. "With its open and aggressive approach, the speed of mainland banking development could be faster than that of Hong Kong."
Ms Leung believes that the banking and finance industry in China is keen to embrace improved practices in order to learn and adjust them to their needs. This is particularly true following China's World Trade Organisation membership and the development of CEPA. "The overall effect is positive and leads to greater profitability," she says.
On the other hand, there is an increasing demand in the labour market, with the number of local and foreign players also growing. Ms Leung stresses that the profitability ratio of corporate banking to retail banking on the mainland is now 70:30, while it is 50:50 in Hong Kong. If retail banking continues to expand, mainland China will require more manpower in the field.
"Banking is a broad industry attracting a range of talent and human resources from different industries such as accounting, information technology and law," Ms Leung notes. "This explains the growing number of middle management employees being transferred from Hong Kong's banking institutions to the mainland," she adds, predicting that the labour market will continue to be dynamic for the foreseeable future.
Meeting the needs of the local banking industry remains important. Ms Leung is working closely with several mainland institutions for mutual recognition of the certified financial management planner (CFMP) qualification, while the HKIB continues to host networking functions for industry players. "The future looks healthy and promising," she notes.