Celent projects that China’s wealth management market will hit US$12 trillion in assets by 2014. After 10 years of rapid growth, the market now faces a turning point as disruptive entrants and a more open environment challenge the incumbents.

Financial institutions face a more complex market in this new environment. The complexities include interest rate deregulation, the entrance of nonbanks into wealth management, asset securitization, globalization of investments, and more. Customer requirements have also changed; for example, 46% of high net worth individuals plan to invest in overseas markets within the next three years. New technologies including Big Data and social media are being applied to wealth management. Some Internet companies have also introduced their own high-yield money market funds, which are almost as fluid as the demand deposits in banks. In the report Trends in China’s Wealth Management Industry, Celent examines trading, asset management, marketing, and technology trends.

“Despite declining AuM at mutual fund companies, there is strong demand for wealth management systems in China,” says Hua Zhang, Analyst with Celent’s Asian Financial Services Group and author of the report. “Large numbers of new asset managers are entering the market. The rapid development and transformation of the trust industry will bring about new IT requirements. The private banking divisions of commercial banks will be made into independent entities, which will also drive demand for technology.”