Being able to conduct bank and other transactions cross-border is important to a significant number of mainland China and Hong Kong clients.

Hang Seng Bank is broadcasting what it says are the merits of cross-border financial services, coming at a time when the “Wealth Connect” regime between Hong Kong, the mainland and Macao continues to take shape. 

In a report, co-produced with consultants Bain & Company, the Asian bank said a study shows that more than 40 per cent of mainland and Hong Kong customers give high importance to open accounts and initiate trades without physically crossing a boundary.

Research conducted for the Greater Bay Area Personal Financial Services Report: Enabling Cross-Boundary Lifestyles also found that around half of mainland respondents and 30 per cent of Hong Kong respondents said they use or are interested in using cross-boundary financial products and services. 

Mainland and Hong Kong respondents also expressed that they would consider increasing the proportion of their total investable assets allocated to cross-boundary investment products by 15 per cent and 10 per cent respectively if the connectivity schemes continue to improve over the next five years. 

In September 2021 China launched Wealth Management Connect, which links its southern province of Guangdong with Hong Kong and Macau, as a way for Beijing to draw these jurisdictions closer together.

Among other details of the Bain/Hang Seng report, it found that affluent families and retirement planners, who have the highest average of investable assets per capita (more than RMB0.8 million/HK$1 million) ($127 million), have the strongest interest in cross-boundary investment. Affluent families often have significant and multigenerational insurance requirements, while retirement planners prioritise steady income opportunities to fund their retirement and potential medical needs, it said. 

In September last year, a survey by HSBC of 2,000 residents in the Greater Bay Area showed that most of “northbound” and “southbound” investors intend to invest more via the Connect system. 

The development of this programme is similar to the Stock Exchange schemes arranged between Hong Kong and the mainland which were launched a few years ago in a bid to boost local equity markets. It also follows the Hong Kong/China Mutual Recognition scheme which came into force in 2015.

The move also coincides with Beijing liberalising its capital markets to encourage foreign investment inflows. There are parallels with other regions’ moves to integrate financial markets. For example, the European Union’s UCITS regime for funds enables investors to buy and sell funds across the EU without having to register them separately in each jurisdiction.

WealthBriefingAsia has asked Hang Seng Bank to clarify the number of people surveyed in the report, and may update in due course.