Personal Finance in Shanghai Remains 'Virgin Territory': Survey

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Last updated at: (Beijing Time) Wednesday, June 12, 2002

Personal Finance in Shanghai Remains 'Virgin Territory': Survey

Personal finance in China's financial center Shanghai is still "virgin territory" that offers huge potential to banks and insurance companies, an AC Nielson survey reveals.

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Personal finance in China's financial center Shanghai is still "virgin territory" that offers huge potential to banks and insurance companies, an AC Nielson survey reveals.

The survey, which studied personal banking, credit card and life insurance services in Shanghai, found an increasing demand for personal financial services amid complaints about existing services.

Though only 30 percent of the respondents are credit card holders, most of them are interested in Visa, Master Card and other cards that are in use around the world.

Young people are most keen on credit cards, the survey shows. Of the respondents between 18 and 24 years old, 70 percent said they would like to try one.

The survey found that life insurance appeals mainly to low income earners. Of the respondents whose monthly income is below 2,500 yuan (300 U.S. dollars), 41 percent have bought life insurance,11 percentage points higher than the city's average.

"Shanghai offers huge potential for banks and insurance companies," said an AC Nielson analyst, who cited the city's largepopulation and rapid growth in per capita income.

Most Shanghai residents surveyed said financial institutions failed to provide sufficient information or suggestions to their customers. Lack of communication, inadequate ATM services and a poor attitude are also among their complaints.

The survey reveals that the advantageous position of domestic banks is under threat as more foreign banks gain access to China'smarket.

Though 50 percent of respondents said Industrial and CommercialBank of China was their top choice for the moment, nearly 40 percent said they were interested in the financial services provided by foreign-funded banks.

To date, Citibank, Hong Kong and Shanghai Banking Corporation, Standard Chartered Bank, Bank of East Asia and Heng Seng Bank haveall launched foreign currency services on the Chinese mainland.

Many overseas insurance companies have also set up branches or offices in China. "They will pose challenges to domestic insurancecompanies when they launch life insurance and other services here in the next two years," said the AC Nielson analyst.

Meanwhile, small and medium-sized domestic financial institutions have been widely accepted, as many survey respondentssaid smaller banks were more friendly than larger ones.

"Domestic financial institutions should upgrade their service quality and come up with new services in order to survive the fierce competition," said the analyst.

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