The Taiwan Banker

Since taking office, President Lai Ching-te has paid active attention to Taiwan’s financial industry, proposing to relax regulations and diversify financial products to turn Taiwan into an Asian asset management hub. After extensively collecting opinions, the Financial Supervisory Commission (FSC) proposed several policies, including one-stop financial services in the Kaohsiung financial industry zone, flexible use of funds, cross-border financial services, and cooperation among financial institutions. To gain a deeper understanding of financial practitioners’ views on the government’s “Asian asset management hub” policies, TABF completed a questionnaire of more than 600 domestic financial practitioners of all ages in early May. The results showed that the respondents are paying close attention to this policy. 65.3% knew that the government is promoting Taiwan as an Asian asset management hub, and 79.0% expressed support for this policy. As for the respondents' views on the chances of success of promoting this policy, the total proportion of those who answered “very high” (13.4%) and “high” (38.1%) reached 51.5%, indicating that most financial institutions know and support this important policy, and hold a certain degree of confidence in its successful promotion. Respondents are particularly concerned about specific measures such as “promoting sustainable green finance” (61.8%) and “easing regulation active ETFs” (47.3%), and believe that “convenient cross-border capital flows” (63.4%) and “diversified global financial products” (63.2%) would be most helpful in promoting the asset management hub policy. In addition, 65% believe that “talent and professional functions” (65.6%) require consolidation. The next area that needs attention is “government effectiveness and policy stability,” at 59.1%. Although the FSC's Asian asset management hub policy has just passed its first anniversary, the pace of policy liberalization has never stopped. Most notably, profit-making measures were less valued in the past. Now, the FSC is listening to opinions and piloting active measures to create new paths for financial development in Taiwan. It also hope to help Taiwan catch up with the recent trend of artificial intelligence trend, allowing it to combine the software and hardware advantages of fintech with its existing asset management business. The development of international finance with Taiwanese characteristics will allow Taiwan to become the future of fintech. Based on the survey results, we can look forward to the short-term goal of “two years to see a difference,” but how should we plan for “four years to see changes and six years to see achievements,” the other two stated objectives of the policy? First, if Taiwan wants to become a regional financial hub, good policy communication will be required, breaking away from the traditional passive press releases and press conferences into more proactive methods such as video interviews, international financial exchanges, social media, and presentations by outstanding industry players. Only after international senior financial executives perceive the changes in Taiwan’s financial environment, will a wider range of industry players start to invest. Meanwhile, Taiwan does not perform badly in quantitative indicators (economic indicators, statistical data) in indices of international financial center development, such as the Global Financial Center Index (GFCI) and Global Power City Index (GPCI). The main lagging items are subjective questionnaire opinions, such as degree of financial development and international institutional exchanges. This data further show the changes that Taiwan needs to become an asset management hub. Second, the professional competencies must be aligned with international demands. International financial institutions may be willing to develop in Taiwan, but they often suffer from gaps in professional skills, which makes it impossible to directly use local talent in Taiwan. In this regard, TABF has also integrated domestic and international training resources to create the Asian Asset Management Hub Training Program, with entry-level, advanced, and high-level courses tailored for practitioners in different businesses with different levels of experience. The course design covers six core modules: asset allocation, high-asset customer service, market research and product development, artificial intelligence & data analysis, risk management, and compliance & legal affairs, providing financial institutions with customized training to cultivate high-level professionals with comprehensively capabilities, strategic thinking, and international vision. In terms of grassroots talent, TABF has collaborated with the College of Global Banking and Finance and several universities to offer introductory courses, extending the starting point of training to campuses, and paving the foundation for industry development. Professional skills are particularly important when it comes to high-net worth clients, who have diverse demands for financial services, especially for asset allocation, inheritance, and tax planning. In addition to rich practical experience, high-net worth financial advisors also need assistance from professionals such as investment analysts, accountants, and lawyers with multinational experience. According to practical experience of the supervisors of foreign financial institutions, the most common problem met in promoting high-net worth wealth management is communication: that is, financial advisors must themselves first have sufficient professional knowledge to fully understand client needs, gain their trust, and provide proper services. Therefore, professional competence certifications for high-net worth financial advisors are necessary, with proper thresholds. Finally, regulation should be relaxed. Last year, the FSC adopted integrated legislative adjustments for banking, securities, and insurance – a significant departure from the previous approach, in which each industry worked independently. In addition, the financial sandbox experiment has sidestepped the cumbersome procedures for amending laws, giving institutions room to carry out small-scale business under existing laws. The FSC can also allow them to first trial innovative business as individual bases and then implement formal legislative amendments when they are operating properly, a recent breakthrough in supervisory practice which ends many cumbersome procedures. In addition, the Taiwanese financial sector has directly carried out investment and financing in major international foreign currencies, breaking away from the restrictions of the New Taiwan Dollar, not only preventing an impact on the exchange rate from the development of an asset management hub, but also expanding their foreign currency fund pool. In the future, the FSC can also gradually increase the asset scale of domestic banks and look at larger international financial institutions. Local financial practitioners gave the FSC’s Asian asset management hub policy an overall score of nearly 80 points, indicating support by most industry professionals. Many international industry leaders who were born in Taiwan are excited for this. In the future, Taiwanese people will no longer have to leave their country to work in foreign financial centers. They can serve local and international customers in Taiwan’s overseas financial centers, while also enjoying Taiwan’s high-quality and friendly living environment and health insurance, and earning salaries in line with international standards. This is the Formosa vision for the financial industry. The author is the deputy editor-in-chief of Taiwan Banker Magazine