Opportunities and risks of "yu'e Bao"
on June 17, Alipay and Tianhong Fund announced that they would jointly carry out financial management business. Alipay launched "yu'e Bao" value-added service, that is, the remaining free funds in Alipay can purchase monetary funds (Tianhong zenglibao fund, which is covered when yu'e Bao refers to financial products below). The feature of this business is that users will find two accounts when logging in to Alipay system. As long as the balance in Alipay is transferred to "yu'e Bao", they can get a certain income. At the same time, users can also use the money in yu'e Bao to buy at any time. The maintenance of the remaining oil source is generally shared with you as follows: the 7-day annualized yield calculated by EBAO is 3.48%. The media commented that the "interest" of yu'e Bao is seven times the current bank current deposit interest rate
in fact, it is inappropriate to compare yu'e Bao business with bank current deposits. What is really similar to yu'e Bao are short-term monetary funds sold by banks and open-ended financial products with no fixed term, which are more similar to the latter. The "interest" generated by yu'e Bao is essentially the investment income of users' purchase of monetary funds. However, yu'e Bao has many advantages over the two. It has higher liquidity than monetary funds, can achieve t+0 transactions, and has higher income than open-ended financial products. In addition, there is no lower limit for the minimum purchase amount of yu'e Bao, which is another major advantage. It is certain that yu'e Bao will have an impact on existing banking products. (at present, the fastest redemption of monetary funds is t+1. Open financial products can be t+0, but the short-term income is much less than yu'e Bao, with a starting point of 50000.)
on the surface, Alipay pushed yu'e Bao to lose the income brought by the user's deposited funds in Alipay account. According to the regulations of the central bank, the interest income generated by the third-party payment reserve belongs to the third-party payment institution. This part of money was previously kept by Alipay, but now a large part will be returned to the user as investment income
however, the potential income from yu'e Bao business will far exceed the interest loss. First, the emergence of yu'e Bao business will certainly increase users' dependence on Alipay, increase Alipay's ability to compete with all kinds of bank cards in the payment field, and increase users' trust in Alipay; Second, yu'e Bao is equivalent to Alipay, which has built its own fund issuance channel. At present, the bank issuance channel is a scarce resource. Fund companies queue up in the bank for issuance, and also compete to pay higher trailing commissions to the bank. The channel has been established. Even if the fund bound by yu'e Bao this time does not make money, it can make money by selling other funds next time; Third, although the business of yu'e Bao made Alipay sacrifice part of its interest income, it had the practical effect of "soliciting deposits". High liquidity and high-yield financial products have always been an important means for banks to attract deposits. For this reason, the central bank even stopped many short-term financial products to curb the "high interest rate deposit solicitation" of banks' property lending behavior. After the launch of yu'e Bao, many users will transfer their current deposits in the bank to Alipay, and the funds in Alipay will only increase or decrease. In fact, in media interviews, even insiders of Alipay called yu'e Bao a "quasi deposit" business. (will the central bank act if technology breaks through regulation again?)
in addition, yu'e Bao will also produce great social benefits. It has carried out a huge audience of financial management knowledge enlightenment education. In reality, because the quality determines the value of equipment, Chinese people actually mainly put their funds in the bank in the form of fixed-term or current deposits, and the proportion of financial management practitioners is not high. However, Alipay has 800million registered users, all of whom are online users. Many of them will understand and practice financial management for the first time through yu'e Bao. (with the help of Alipay, Tianhong zenglibao fund has more than 1million accounts in six days, and many people may be the first to buy the fund. Can yu'e Bao be regarded as a promotional product? In the future, payment can sell products with higher profits through this channel.)
it is noteworthy that yu'e Bao is a monetary fund and a more attractive financial product launched by Alipay. In fact, it has the effect of breaking the monopoly position of banks in the sales of financial products and even "soliciting deposits" as a private force, and it is another breakthrough of monopoly by new technologies and new business models. The banking industry should reflect on why it can't launch new financial products with high liquidity and high yield like yu'e Bao, which is widely solicited for design ideas? Can't do it, or won't do it? The emergence of yu'e Bao once again exposed the bank's profiteering space. Hong Qi, President of Minsheng Bank, once publicly declared that the bank's profits were too high to be announced sometimes. For decades, under the oligopoly pattern, China's banking industry has enjoyed its success by relying on the cost free trade of interest rate spread. High profits have made them lose the impulse of financial innovation. It is hoped that the emergence of yu'e Bao will stimulate the banking industry to consciously launch more competitive financial products than yu'e Bao
finally, let's talk about the risk of yu'e Bao. Yu'e Bao is a monetary fund. According to historical data, the current annualized income of the monetary fund has no record of loss. It is relatively safe to shut down the experimental machine or the equipment suddenly and automatically stop. However, the monetary fund cannot resist the occurrence of the black swan event, especially when the economy itself is not healthy. Once the fund shrinks sharply or investors focus on redeeming their investments, money market funds will face a serious passive situation. This situation occurred in 2006, and there are signs looming in recent days (you can pay attention to the soaring interbank offered rate in the banking industry and the rumors of capital default). In the past two years, in order to collect funds, China's banking industry has issued excessive financial products, and the repayment pressure and risk have also increased significantly. In fact, many people regard the popular bank financial products and monetary funds as an important part of China's shadow banking, and the related risks (credit risk and moral hazard) cannot be underestimated. If you are too worried about the above problems, you might as well choose to deposit the funds in the bank. In addition, if there are problems in China's economy, yu'e Bao will also be an egg under the nest