An Ant Group logo appears at the company’s headquarters, Alibaba’s subsidiary, in Hangzhou, Zhejiang Province, China, on October 29, 2020.
Aly Song | Reuters
BEIJING: Vanguard’s experiment with financial technology in China shows first signs of success.
In less than a year, more than a million users have signed up for “BangNiTou,” a smartphone-based investment advisory product managed through the fund giant’s joint venture. US investment with Ant Group, a subsidiary of Alibaba.
According to a BangNiTou statement on Thursday, just four days after Vanguard said it would stop pursuing a mutual fund license in China. Instead, the company plans to focus on its partnership with Ant.
Ant operates Alipay, one of the two dominant mobile payment apps in China, where BangNiTou is located.
The Vanguard branded product means “help you invest” in Chinese and was launched in April 2020. It is a form of automated financial planning and robotic recommendation that uses data analysis to determine how a customer you have to invest based on factors like age and income. .
Although these automated investment products have increased in popularity in the United States, the concept of personal finance, whether through human or automated advisors, is still much less common in China. Most premises save a lot for an investment in the real estate market or for medical treatment in case of serious illness. This is partly the result of a limited release of health insurance, stock market volatility and high minimums for investment in funds.
For BangNiTou, the minimum investment is 800 yuan ($ 123), about 10% of the average monthly salary officially reported in cities.
In July, Vanguard told the Financial Times that new customers were earning a significantly higher amount, averaging about $ 1,575 for a total of $ 315 million in assets among 200,000 users. Updated figures were not available.
Ant has the majority stake
“Although the number of BangNiTou users has increased rapidly, the fund investment advisory market in China is still in an incipient phase with significant potential for further growth,” it said in a statement Peter Zhang, CEO of Vanguard Joint Venture with Ant.
Foreign financial institutions received a long-awaited green light last year to take full ownership of local Chinese companies in futures, investment fund management and securities. It is not clear which rules can be applied in financial technology or fintech technology.
Vanguard’s joint venture with Ant was launched in late 2019. Ant has a 51% majority stake, according to Chinese business database Qichacha.
The Alibaba-affiliated company claims about 1 billion users worldwide. He became one of the first players in China’s wealth management industry with his Alipay-linked “Yu’e bao” monetary fund, which had about 1.7 trillion yuan in assets managed at the time. maximum in early 2018.
Late last year, Chinese authorities abruptly suspended Ant’s plans for what would have been the largest initial public offering to date. Beijing has subsequently increased its regulation of fintech technology and said the industry should be subject to the same rules as banks.