China is an attractive proposition for global asset management firms. The market is set to have the world’s second-largest asset management industry by 2023, with continuing liberalizations offering the promise of more direct access for overseas firms in the coming years.

This possibility makes setting up shop in China and earning the attention of Chinese investors a matter of great urgency for global firms. The challenge is that this market – largely inaccessible to overseas players until very recently – is complex, unique and fast-changing.

A new FleishmanHillard report, “The Future of Asset Management in China,” explores this through the lens of investor expectations. Drawing on insights from 250 Chinese investment professionals, the report suggests that well-orchestrated strategic communications and reputation management are now as necessary to success in China’s financial services sector as the right licenses, resources and infrastructure. Three findings, in particular, may change the way foreign firms approach this market:

1. Credibility counts for more than performance

While investment returns are a priority for 64% of Chinese investors, brand credibility is cited by 74% as critical to asset manager selection. Furthermore, this far outweighed considerations about the nationality of origin of the investment services provider. Only 33% of investors said it was very important to them to choose an asset manager from China, nearly matching the percentage who said the same for a foreign asset manager (32%).

A further positive indicator for foreign fund managers is that 91% of respondents said they already invest in private fund products from wholly foreign-owned enterprises (WFOEs), despite these products having higher fees than local alternatives and being relatively new to the market. What’s more, 69% admitted that their trust in global brands was a factor in their decision to purchase an investment product from a WFOE or foreign-local joint venture instead of a local asset manager. These investors also saw foreign brands as offering better performance (72%) and unique strategies (68%).

This all suggests that foreign fund managers are facing a more level playing field in China than they may expect and that investors will choose a credible brand over one offering better returns. This highlights the importance of reputation equity for firms operating in mainland China.

2. Sustainable investing is coming to the fore

In line with global expectations, Chinese investors identified the most important traits in a fund manager as transparency in communications (60%), sophisticated risk management (60%) and transparent fee disclosure (58%). More surprisingly, environmental, social and governance (ESG) expertise was next on the list. It displaced commitment to investor education and local expansion, with 52% considering strong ESG product offerings very important and a total of 94% citing this as very or somewhat important.

As China’s leadership positions the nation as a global environmental champion for the future, this enthusiasm for ESG investing gives sophisticated international firms the opportunity to lead the conversation in this space based on their global expertise.

3. Multiple channels of communication matter

China’s professional investors and investment professionals favor a variety of information channels, with similar numbers preferring independent financial advisors (74%), financial media (68%), social media (67%) and websites (66%). This confirms that digital strategies need to be a core component of any communications effort in China, while also underscoring the enduring importance of person-to-person relationships and the support of trusted financial advisors.

This variety presents a challenge for foreign firms, which will need to master multiple and often unfamiliar channels to reach their intended audiences in mainland China.

With the announcement that China is removing foreign ownership limits on securities, futures and fund management firms in early 2020 – and the possibility that investment management WFOEs could obtain licenses to directly target the retail market – financial institutions with ambitions in China would be wise to do the work now to boost their brand recognition and reputation.

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To learn more, please download FleishmanHillard’s “The Future of Asset Management in China” report here.

Over the course of four days, Money20/20 USA (client) brought together C-level executives, thought leaders, innovators and disruptors from around the world to have conversations about the future of money. Wednesday, the final day of the conference, drew a record number of attendees who were eager to learn and network. During the final hours of the event, attendees heard from more C-suite executives and entrepreneurs about topics like cybersecurity and predictions for the payments landscape.

Day Four

Fighting Cyber Crime  

If there’s one thing we’ve learned this week, it’s that the future of money will be shaped by data and technology. Cybersecurity is a focus for all industries, but as fintechs and incumbents alike are finding ways to make their products readily available across digital interfaces, more concerns have been raised about mobile devices’ vulnerability to cyberattacks. And with good reason. During a fireside chat, Chris Reid, executive vice president of data and cyber and intelligence services for North America at Mastercard, said, “Every minute of every day, there are 127 new devices being connected – all posing their own vulnerabilities. In this year alone, 3.2 billion records have been breached.”

According to Reid, Mastercard is going the extra mile to prevent these occurrences through AI technology, investment in cyber talent and pursuing partnerships to protect the commercial ecosystem. In addition to bolstering Mastercard’s products on the back-end, the transparency around what the company is doing to protect its consumers’ data in an age of digital uncertainty builds on the corporation’s most valuable asset – customer trust.

Payments of the Future

Executives from PayPal, Citibank and Square sat down with Deloitte to discuss the future of payments. The panelists began by looking back on what the industry saw in 2019, including new technologies and the rise of disrupters. They agreed that these are driving opportunities for all companies in the space, including banks, fintechs and incumbents.

However, they also identified some of the key challenges that come with a changing industry, such as system integration, meeting the constantly evolving expectations of customers and issues with the underlying infrastructure. Citibank shared that the U.S. is still an emerging market for payments. Looking ahead to 2020, panelists expressed skepticism around cryptocurrency and expect a larger push to real-time payments and a rise in social currency.

To learn more about the themes and sessions at Money20/20 USA, visit @Money2020 or explore their website.

On day three of Money20/20 USA (client), attendees heard about the emerging technologies that are revolutionizing how consumers interact with financial services companies.

FleishmanHillard also moderated a panel with leading CMOs and co-hosted an impactful conversation about the gender pay gap.

Day Three

The AI Opportunity

“AI is fundamentally rewriting how financial services will be delivered,” said Tammy Petro, executive director of wholesale payments at J.P. Morgan (client).

Petro was joined by Zor Gorelov, CEO and co-founder of Kasisto, for a fireside chat about how AI is changing the customer experience for business banking. Together, they discussed the benefits of AI, including implementing virtual assistants, like Kasisto’s KAI, to improve customer interactions. They also deliberated the importance of AI adoption for the broader financial services industry, especially as consumer expectations for this type of technology grows. However, both speakers agreed that although there is a use case for digitized support in financial services, humans aren’t going anywhere. Petro noted that J.P. Morgan will always have customer service agents, and Gorelov believes we’re still decades away from general AI that can mimic humans in every way.

A Digital Shift in the Banking Landscape

One of Tuesday’s most interesting keynote sessions was a panel featuring the founders of Chime, Varo and Grasshopper – all companies that provide various digital banking services to consumers, businesses and entrepreneurs. The panelists engaged in an animated discussion about the need for alternative banking options, especially for consumers with limited financial assets, and why now is the right time for new, disruptive digital models to enter the banking space.

All three companies are focused on innovation and technology that help deliver a better customer experience. The speakers also stressed the importance of understanding consumers’ complex financial needs and addressing their challenges by offering services they can’t always get at larger, more traditional banks. For example, Judith Erwin, founding CEO of Grasshopper Bank, highlighted that wire transactions at Grasshopper cost $1.13, while most big banks charge anywhere from $25 to $50 for the same service.

A meaningful quote from Colin Walsh, CEO and co-founder of Varo Money, illustrates why digital banking leaders say it’s time for a change, “There are too many consumers underserved and overcharged by existing banks.”

The Power of Marketing and Communications

The CMO Power Lunch featured marketing and communications leaders from Marketo/Adobe, Refinitiv (client), Synchrony and Western Union (client) for a conversation about the opportunities and challenges executives in the financial services industry face. The panel was moderated by Marjorie Benzkofer, FleishmanHillard’s chief strategy officer.

Panelists discussed the importance of putting the customer at the center and identifying new ways to meet their needs through initiatives like experimenting with digital innovations, sharing compelling content and leveraging data to offer more personalized experiences. The role of trust, transparency and accountability was another key theme.

“You want your love tank to be totally full with love from your customers,” said Sarah Kennedy, chief marketing officer at Marketo and vice president of global marketing at Adobe.

The conversation also took on the impact of societal issues, and how brands should address them in marketing and communications strategies. Nicole Vogrin’s, chief corporate affairs and communications officer at Western Union, advice to executives who speak out about social issues was, “stick to the facts” and approach it as an opportunity to educate.

The Future is Female

The day culminated with dinner and conversation at an event hosted by Money20/20 and FleishmanHillard. Thought leaders in the financial services and fintech space came together for a discussion about closing the gender pay gap in the industry. The attendees explored who is ultimately responsible for inspiring change on this topic, with many agreeing that championing this issue starts at the top, but noting that grassroots efforts are needed to bring it to life and ensure accountability.

The group also debated where the fight for more women in leadership fits into the equal pay discussion, and shared thoughts on which one will come first. Women’s roles as caretakers, and how it is often a barrier to gender parity, was also a key theme of the night.

As the show comes to a close, catch highlights from the last few days at @Money2020 and @Fleishman, and stay tuned for one final update from our team on the ground.

Audience members during day two of Money20/20 USA (client) learned how the industry is championing a more financially-secure world. Through initiatives like creating digital wallets, targeting Gen Z and placing a greater emphasis on education, leading companies are aiming to make the financial system more accessible across the board.

Day Two

Digital Wallets

David Marcus, head of Calibra, took the stage to discuss Calibra’s future and address recent headlines about the company. Marcus remains confident and positive about Calibra’s success, highlighting its goal to build new payment rails and be the most secure way of moving money. He expects to see banks joining the Libra Association, the independent governing body that oversees Libra, once they have further clarity on regulation.

“They [consumers] will trust us because we will provide a lot of value, we’ll make strong commitments and we’ll be very good at sticking to these commitments for long periods of time,” Marcus said.

Personal Finance Apps

Attendees also heard from Jason Wilk, CEO and co-founder of Dave, the number one personal finance app in the United States. With more than 2 million Gen Z users, Wilk spoke to how the app was designed specifically with this generation in mind. By analyzing customer data, which revealed Gen Z’s demand for simplicity, the team created what Wilks describes as a “picture book” for managing finances. The app also includes features geared toward this audience, like AI to predict user spending habits and a spinoff product that aggregates local opportunities for users to make extra money on the side – a nod to the entrepreneurial/gig behaviors of Gen Z.

Wilk’s advice when targeting Gen Z: create a streamlined and personalized customer experience and be open to shifting communications channels to better reach this audience.

Financial Literacy

The show’s major keynote this year was Charles Schwab, founder and chairman of The Charles Schwab Corporation. In addition to sharing personal anecdotes about his career, Schwab discussed the lack of financial literacy in the U.S. and shared insights on how the industry can help solve these challenges by offering more education and providing easier and better access to services. This, along with staying one step ahead of consumer needs and being more affordable than competitors.

Additionally, some of the big news of the day was Peter Hazlehurst, head of payments at Uber, announcing the launch of Uber Money, which will include a digital wallet and upgraded debit and credit cards. The move signals Uber’s continued push into financial services and addresses the challenges of Uber’s gig workers.

Looking Ahead

Tonight, we’re excited to be hosting an important discussion with Money20/20 about the gender pay gap. Attendees will have a chance to dissect the issue, its impact in the financial services space and explore how the industry can come together to combat it.

Be sure to keep following @Money2020 and @Fleishman for more exciting updates and powerful conversations!

Pumpkins might still be on shelves, but holiday deals are already dropping for many of the nation’s top retailers. Compared to 2018, this year brings six fewer days between Thanksgiving and Christmas. A shorter shopping season, combined with always-on online retail and year-round deal days, means consumers are holiday shopping NOW, and brands are getting on board.

For retail marketers that means more competition and higher consumer expectations, as the next two months are bound to be a cluttered, noisy space.

Here are a few new rules to help brands connect with consumers this holiday season:

• Help consumers escape in-store – Americans spend 11+ hours each day looking at screens and, cross-generationally, we are craving deeper connections. Many may be surprised to learn that even 58% of Gen Z prefer to shop in stores as a form of retail therapy. Help consumers disconnect from the online world at your brick-and-mortar location this holiday season by making the in-store shopping experience personable and convenient: create a warm, comfortable atmosphere (couches, anyone?) that’s easy to navigate, showcase top products out-of-box for consumers to play with, host unique store events and decorate. Make the browsing experience fun.
• Give authentically, not just because it’s the holidays – The next two months will be ripe with charitable giving, and in a consumer environment where 69% of consumers say it’s more important for brands to talk about their societal and environmental impact versus product benefits, companies may be tempted to grab a megaphone and go all in. Retailers: take caution and be mindful that giving MUST connect authentically to your overall brand. Otherwise, consumers will see right through it. Don’t create a responsibility platform to get credit; instead, commit to creating shared value that’s meaningful to your brand year-round and look for unique ways to amplify that value during the holidays.
• Take care of their cares – Promotions are a great way to showcase products this holiday season, but be sure to take care of something even more personal to consumers – their data. Put plans in place now that will give customers complete trust in your ability to protect data. It will save your brand’s reputation and integrity and earn you loyal customers.
• Don’t forget the fundamentals – Nearly 1 in 3 Americans will experience holiday burnout before Christmas. Serving as a resource that makes holiday moments (including shopping) easy and enjoyable is one of the best approaches you can take to help lower your audiences’ stress levels. Offer buy online pick-up in-store (BOPIS) and competitive deals. Ensure websites can handle the influx of traffic. Make sure stores are adequately staffed with friendly, knowledgeable associates. Create frictionless experiences between all purchase channels. Make customers excited to shop with you.

The National Retail Federation expects holiday retail sales during November and December to increase between 3.8% and 4.2% over 2018 – strap in for this exciting (sleigh) ride!