Greater Bay Area financial services continue to flourish: PwC

Businesses held up well despite the pandemic, the report said.

PwC China's new report, Financial Services in the Greater Bay Area: The GBA takes shape, got insights from PwC clients across financial services, regulators, trade bodies, and academics.

Issues raised by the respondents were arranged as follows:

• Living circles – rather than being a test-bed for China-wide reforms, the interviewees saw the future of the GBA as greater and with deeper integration;
• Accelerated digitalisation – remote working and online interaction mean business has held up well during COVID. It has also highlighted the need for market players to invest adequately in their digital services;
• Differentiation in the marketplace – new digital services may be progressing. New entrants in the GBA will also need smart marketing strategies to stand out from incumbents;
• Wealth Management Connect and future reforms – there is much anticipation and speculation around Phase Two of Wealth Management Connect (WMC);
• Talent – competition has never been fiercer. Both traditional and new skills are in high demand; and 
• The Greener Bay Area – there is scope for more investor awareness on ESG issues. This may be one way for new entrants to differentiate themselves and build brand awareness.

"For all our interviewees, the GBA is now a reality," said PwC China regional economic cluster and financial services leader James Chang. "It is taking physical shape in places such as Qianhai and Hengqin, but it also is defined by a broad range of policy initiatives – from WMC to mutual recognition of qualifications. The GBA presents a series of new opportunities, as well as challenges, for market participants."

Interviewees also cited other developments, such as the Hong Kong Monetary Authority's Commercial Data Interchange (CDI) project, which leverages alternative data to facilitate lending to SMEs. This has the potential to significantly boost business activity in the GBA.

"Along with CDI, we are seeing some game-changing initiatives in retail and wholesale digital currencies," added PwC Hong Kong risk assurance partner says Gary Ng. "These will greatly benefit cross-border transactions, and therefore the economy of the GBA."