Ant VP: Digital Finance Boosts High-Quality Wealth Mgmt
On September 25th, the "2024 China Institutional Investors Forum and the 10th Anniversary of China Fund News" hosted by China Fund News was held in Shenzhen. The theme of this forum was "Renewal and Departure: Writing a New Chapter for High-Quality Development." Zheng Yanlan, Vice President of Ant Wealth Business Group, was invited to attend and deliver a keynote speech titled "Digital Financial Services: Aiding the High-Quality Development of Wealth Management." She shared the exploration and practice of Ant Fund, a leading third-party wealth platform, in the field of digital financial services.
Zheng Yanlan's speech delved into how financial technology can empower the high-quality development of the wealth management industry. She pointed out that despite the continuous improvement of wealth management's inclusiveness, optimizing investors' return experience remains the industry's biggest challenge and pain point.
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By sharing Ant Fund's innovative practices in digital financial services, she emphasized the crucial role of advanced technological means in reducing service barriers, enhancing service accessibility and customer satisfaction, and providing personalized investment advice, offering a reference direction for the digital transformation of the wealth management industry.
From the current standpoint, Zheng Yanlan called for all parties in the industry to jointly build a new era of digital financial services. She stressed that financial institutions, professional service providers, and content providers should work together to create a more high-quality and efficient financial service experience for users.
Wealth Management Inclusiveness Improves
Optimizing Investor Return Experience Remains a Key and Difficult Point
Zheng Yanlan first pointed out that against the backdrop of the continuous improvement of wealth management's inclusiveness, how to further enhance the experience of investors remains the biggest pain point and challenge faced by the entire wealth management industry.
She said, "Currently, the wealth management industry has gradually moved from the onlineization of financial transactions to the digitalization of financial services. This process is not something that can be achieved overnight. Looking back, twenty years ago, standardized electronic settlement frameworks such as the small and large payment systems and the open trading and data interaction protocols led by the China Securities Regulatory Commission had already been established, and the electronic payment and settlement were essentially completed."
Zheng Yanlan further pointed out that ten years ago, with the rapid development of mobile internet, financial transactions gradually moved online. The birth of products like Yu'e Bao is a typical representative of this trend. Today, the majority of retail investors' fund and stock transactions are completed online.She emphasized that finance itself has certain barriers to entry, and investors require professional services. Traditional offline services have high barriers, and it is hoped that the era of AI large models can reduce the barriers to services through technological means, enhance the accessibility of services, and allow everyone to enjoy professional financial services.
Despite the continuous improvement of the inclusiveness of wealth management, Zheng Yanlan pointed out that the biggest difficulty and pain point in the industry remains the issue of investors' perceived returns.
She introduced, "According to the common understanding in the industry, Ant Fund breaks down investor returns into Alpha brought by product selection, Beta brought by allocation, and 'X' influenced by user holding behavior. These three factors form the golden triangle of financial management, corresponding to the three ultimate questions for investors in financial management: what to buy, how much to buy, and what to do after buying."
According to platform data, the contributions of Alpha, Beta, and "X" to returns are 10%, 40%, and 50%, respectively. Based on this, she pointed out that when Beta is declining, simply selecting good products cannot completely solve the problem, and healthy financial behavior may significantly enhance investors' perceived returns. Overall, allocation and user behavior are the main reasons affecting returns.
Based on the "allocation, selection, and holding" triangle concept, a digital service matrix is built.
In response to the difficulties and pain points faced by the current wealth management industry, Zheng Yanlan further analyzed the exploration and results of Ant Fund in digital services, and pointed out that Ant has been committed to building a digital service matrix for the financial triangle of allocation, product selection, and holding.
"Since its establishment in 2013, Ant Fund has promoted the onlineization of financial transactions with Yu'e Bao as a symbol, providing low-barrier, highly convenient, and diversified investment options, achieving the inclusiveness of financial services." Zheng Yanlan pointed out that with the continuous development of the capital market, investment products and channels have become increasingly rich, with public funds alone exceeding 10,000. Ordinary investors feel confused in their choices. After the implementation of the asset management regulations in 2018, the rigid payment was broken, and even seemingly stable products may experience drawdowns due to fluctuations in the bond market.
In this context, investors are increasingly aware of the importance of "financial management has risks, and investment needs to be cautious," and the value of financial services is becoming more prominent. Ant Fund firmly believes that the core of service lies in professionalism, which includes investment research and product selection capabilities co-built with the industry, personalized investment advisory allocation services, and long-term investor education. Although professionalism is a hard-core and slightly cold concept, Ant Fund is committed to conveying a service concept with temperature to users. How to do a service with temperature?
In terms of allocation services, Zheng Yanlan mentioned that allocation is an old but crucial topic. Traditional allocation services are mainly conducted offline, where financial managers generate PDFs after face-to-face communication with customers and hand them over to users. Although this process is intuitive and timely in feedback, it has problems such as high service barriers, inability to provide services around the clock, and difficulties in tracking strategy recommendations afterwards.To meet user needs, Ant Fund collaborated with six universities in the second half of last year to launch a "three pots of money" allocation service. These three pots of money are: saving a pot for flexible access to short-term liquidity funds, setting aside a pot as a basic living guarantee for the family's future, and investing a pot to achieve capital appreciation.
Zheng Yanlan stated that this service aims to help investors clarify the different objectives of their funds, first saving enough for living guarantees, then engaging in investment and financial management, and improving financial behavior through a balanced dispersion across major categories and tracks. According to platform data, users with balanced allocations saw an increase in returns of over 88% compared to those with unbalanced allocations, and the maximum drawdown was reduced by 6%. This fully demonstrates that reasonable allocation can significantly enhance the user's perception of returns.
In terms of product selection services, Ant Fund upgraded the overall framework of Ant Wealth Selection in the second half of last year, incorporating more tool-based products and cost-effective selection indices. "This move aims to select products with lower comprehensive costs and smaller tracking errors, so that funds can better replicate the beta value of the index and enhance their tool attributes. Since its launch, this service has saved users nearly 300 million yuan in fees," Zheng Yanlan introduced.
In the first half of this year, Ant Fund also cooperated with more than 80 fund companies to launch the "Worth Investing" column. Due to the rapid changes in the market, ordinary investors find it difficult to accurately grasp the market trends, and "Worth Investing" releases three most consensus tracks each month through industry research. Since its launch, the column's research win rate has exceeded 80%, and the probability of users following "Worth Investing" to make money has reached 73%.
Zheng Yanlan said that under the stable track, Ant Fund has set up two directions of "Seek Stability" and "Seek Profit". The "Seek Profit" Ant Wealth Selection has chosen high-cost-performance products with good performance benchmarks and controllable drawdowns, which users feel good about holding.
"For users pursuing higher stability, Ant Fund launched a product at the end of last year that pursues positive returns, focusing on positive returns and low risk. Since its launch, this product has achieved a 100% positive return," she said.
Regarding user behavior, Zheng Yanlan emphasized that there is indeed a certain threshold and effort in the financial field, so Ant Fund pays more attention to investment education and companionship. She believes that investment education should not just show users videos, but should go deep into users' financial behavior. To this end, the Ant Wealth community provides various forms of investment education and companionship, including topic discussions, photo album displays, short videos, live broadcasts, and community interactions.
For users who only hold Yu'e Bao, they can watch others share their small money-saving experiences under the Yu'e Bao page and learn financial knowledge. Fund investors can also share their insights in the product discussion area, and even express their emotions through interesting short videos. In addition, fund investors can watch discussions between fund company hosts in the live broadcast room, or exchanges between fund managers and ordinary users about position diagnosis, which are very popular among users.
Throughout the companionship process, fund managers play an important role. They will provide timely graphic interpretations to users when the market conditions change, informing market dynamics and suggestions. Fund managers will also directly respond to user questions in the "Please Answer" column and lead investors to research industries and leading companies together.
According to Zheng Yanlan, thanks to these forms of investment education and companionship, last year more than 200 million users on the Ant Fund platform learned financial knowledge. Data shows that among users who have learned financial content, the proportion of allocated users has increased by 22.5%, and the proportion of fixed investment users has increased by 7.6%. These contents have effectively promoted the development of users' financial behavior towards a healthier direction.Actively Utilize AI Large Models
Empower Digital Financial Services
In her speech, Zheng Yanlan also introduced the AI-based intelligent butler, Ma Xiaocai. She stated that, thanks to advanced AI technology, Ma Xiaocai's expressions are closer to human language, and the content it provides is more practical and personalized.
Zheng Yanlan mentioned that in terms of simplifying complex information, Ma Xiaocai can transform complex financial report information into concise and clear charts and structured expressions within five seconds, greatly enhancing users' efficiency in understanding financial reports. Currently, Ma Xiaocai supports the interpretation of financial reports for up to 10,000 individual stocks and 800 sectors.
In terms of providing professional insights, Ma Xiaocai can distill key information from a vast amount of market news and, combined with the opinions of professional financial institutions, offer intuitive market analysis and investment advice. Users can engage in multiple rounds of dialogue with Ma Xiaocai, which will accurately locate users' financial needs based on 1,200 user factors and 2,800 asset factors, and provide personalized investment advice.
"Ma Xiaocai's monthly active users have exceeded 70 million, with more than 45% coming from cities below the third tier," Zheng Yanlan revealed. Data shows that users of Ma Xiaocai have significantly improved in financial behavior health indicators such as frequent trading, fixed investment, and holding duration.
Finally, Zheng Yanlan emphasized that Ma Xiaocai is not only a representative of digital financial services in the AI era but also an important vehicle for promoting collective progress in the industry.
She called on financial institutions to provide professional products, professional service providers to offer more services, and content providers to contribute in-depth and rich wealth information, while Ant Fund is committed to creating more new scenarios to better connect all parties with users, thereby providing users with a higher quality of financial service experience.