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China Financials Survey - Anatomy of a financial consumer

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We recently published our latest financials survey exploring consumer attitudes towards financial products and services in mainland China.

The survey – the fourth in a series that began in 2018 – examines what people think about payments, savings, insurance and investment in a market where the financial sector now holds around USD57 trillion in assets.

Our sample of 2,572 people may not be fully representative of the entire population as it is skewed towards individuals with higher income than average, those living in more developed areas, and people of working age. But we think it provides a reasonable gauge of changing consumer preferences, especially since people tend to use financial services more as their income levels rise.

Some of the survey findings surprised us. Others encouraged us. And many gave a glimpse into changing views on different platforms and service providers. We highlight a few key takeaways below.

What surprised us

  • Around 40% of the respondents saw their disposable income rise over the past year despite a slowdown in GDP growth and occasional pandemic-related restrictions.
  • In the coming year, over 50% of the respondents want to own either a little more or about the same across a range of financial products: we think this is encouraging.
  • Despite risk aversion, consumers still prefer income and total return investment strategies over capital preservation and inflation hedging; however, capital preservation is the most popular strategy among low income groups.
  • Healthcare (33% in 2022 vs 24% in the 2021 survey) has replaced e-commerce/shopping (30% in 2022 vs 37% in 2021) as the most useful service provided by apps developed by financial institutions.

Financial institution preferences

  • Banks remain the most trusted source of financial advice, with the preference growing to 45% in 2022 from 32% in 2021; insurers come next, followed by internet platforms…
  • …but 62% of consumers prefer internet platforms for money transfers and payments, ahead of transfers via bank app or ATM, and with cash in third place.
  • Banks are seen as the most important channel for buying asset management products (48%), followed by fund managers, then online channels.
  • Insurers’ brand, reputation and additional service provided are the most important factors when purchasing long-term insurance products.

Consumer education is key

  • Most respondents aim to achieve a 40-80% replacement ratio – that is, a retirement income equivalent to more than 40% of their pre-retirement earnings…
  • …but only 17% save more than 40% of income for retirement; a lack of product knowledge is seemingly the main factor behind low contributions, and this underlines the importance of better trained sales teams and better financial education for consumers.
  • Similarly, the most important reason why people do not intend to buy critical illness products is because they believe medical insurance can cover medical expenses, and ignore the broader benefits of critical illness cover.

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