In 2012, the wave of innovation surged over the asset management industry in China. The main target of innovation is to penetrate from one line into other lines of the industry.

“In the upcoming 10 years, only minority of financial institutions can succeed in multiple fields and form into large-scale financial groups. The majority of institutions will still survive in fields they are familiar with.” judged Jiang Saichun, Analyst in Chief of Desheng Fund Research Center.

Mixed operations debut

According to data published by China Trust Association, trust asset in China mounted to 6.32 trillion yuan by the end of third quarter (Q3) this year, hitting a new high. In particular, the asset amount increased by 780 billion yuan in Q3, larger than that of 730 billion yuan in first-half of 2012. The growth rate of the first three quarters reached 31.4 percent.

In comparison, the total asset of China’s insurance industry was 6.9 trillion by the end of Q3 with one-digit growth rate. Calculated under this tendency, trust will surpass insurance in Q1 next year at latest to become the second largest financial industry next only to banking. 

However, everyone is eyeing this big cake, thus the high growth might not keep up.

Security companies, fund companies and even insurance companies are grabbing trust companies’ businesses by lower charge. By the end of October, security companies’ asset management business exceeded 973.5 billion yuan. The number by the end of last year was 281.87 billion yuan, showing a sharp increase within 10 months.

Experts predict that the next 10 years will be a key period during which financial institutions will compete intensely in mixed operations.

The strong becomes stronger

Currently, CITIC Group and Ping An Group both possess such capacity to surf in mixed operations. Nevertheless, under the separate operation supervision, the internal resources of the industry have not been effectively integrated.

Supervision towards mixed operations is becoming a leading tendency. In 2012, the deregulation from supervisors made possible the business integration among huge financial groups. In the cut-throat competition, these financial groups will become stronger and stronger relying on resource advantages.

“After 10 years, financial tycoons engaging in mixed operations are expected to be born,” said Jiang.