Inclusive finance aims to enhance the coverage and accessibility of financial services, with the ultimate goal of achieving equalization of financial services, allowing every entity to share in the benefits of financial development. As China's inclusive finance enters a new stage of development, credit coverage and satisfaction have reached a high level, and the focus of financial services is expanding from solving financing difficulties to meeting a broader range of financial needs, such as wealth management and insurance.

Against this backdrop, inclusive wealth management, which primarily serves micro, small, and medium enterprises (MSMEs) and residents, is becoming increasingly important. In September 2023, the State Council issued the "Implementation Opinions on Promoting High-Quality Development of Inclusive Finance," which clearly pointed out the need to "build a comprehensive, rich in strategy, and clearly layered wealth management product and service system" and "meet the diversified asset management needs of residents," reflecting the continuous deepening development trend of China's inclusive finance.

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Challenges Faced by MSME Wealth Management

With the development of the market economy and the popularization of financial knowledge, the awareness of wealth management among small and micro business operators has gradually increased. More and more small businesses are beginning to value fund management and improve the efficiency of fund use through reasonable financial planning.

According to statistics from the State Administration for Market Regulation, by the end of 2023, there were 124 million individual industrial and commercial households and 52 million MSMEs nationwide. The annual business income of over 170 million small and micro businesses is close to 50 trillion yuan, making them one of the most potential customer groups for bank wealth management. They themselves have rich financial needs, and increased income can lead to enhanced operational resilience.

However, in practice, MSMEs and individual industrial and commercial households face many challenges in wealth management: First, there is a large fluctuation in funds and frequent turnover. MSMEs have short business cycles, unstable income, fast fund turnover, and high liquidity requirements for financial products. Second, they have a lower risk tolerance. MSMEs have weak risk resistance capabilities, and maintaining stable production and operation is their primary goal. Therefore, when managing funds, they tend to prefer low-risk, stable financial products. Third, there is a lack of professional knowledge. MSME owners often lack professional financial knowledge and experience, and are also constrained by factors such as information asymmetry, making it difficult to make reasonable investment decisions. Fourth, the matching degree of traditional financial products is low. The current supply of financial products is mainly aimed at large and medium-sized enterprises or individual customers. For MSMEs, the threshold for large enterprise asset management services is high and the costs are high; individual financial products do not meet the dual needs of MSMEs for fund liquidity and profitability, and there is a relative shortage of suitable products to choose from.

How to effectively meet the financial needs of this large group is an important issue that inclusive wealth management needs to address urgently.

Innovative Practices in MSME Wealth Management

To solve the above difficulties in MSME wealth management, practitioners have innovated from multiple dimensions such as products, technology, and service models, and have made significant progress:In terms of product innovation: Tailoring to meet diverse needs. Firstly, miniaturization and fragmentation. Develop financial products with low thresholds and low initial investment amounts to facilitate small and micro enterprises (SMEs) in managing scattered funds flexibly. Secondly, customization and scenario-based design. Design personalized financial products for SMEs in different industries, scales, and development stages to meet their differentiated needs. For example, launch customized financial products targeting the cash flow characteristics of e-commerce, catering, and other industries. Thirdly, intelligence and automation. Use technology to create precise profiles of SMEs, providing more intelligent and personalized financial services. Based on the risk preferences and capital needs of SMEs, intelligently recommend suitable financial products and achieve automated asset allocation and rebalancing.

For example, at the Bund Summit, MyBank launched an intelligent inclusive financial management system for SMEs and merchants - the "Cuckoo" system, offering three featured financial products for micro businesses. For instance, Yu Li Bao serves the money that micro businesses need at any time and is a "real-time earning wallet" for them; Wen Li Bao serves the money that micro businesses do not need in the short term and is a platform specializing in bank financial products; Yue Li Bao serves the money that micro businesses need at any time each month and is a "zero deposit striving" savings pot for them.

In terms of technology application: Technology empowers inclusive financial management to improve service efficiency. Firstly, big data risk control. Use big data technology to build a credit assessment model for SMEs, achieve precise risk pricing, and reduce service costs. Secondly, artificial intelligence application. Apply artificial intelligence technology in product design, risk control, customer service, and other aspects to enhance the level of intelligent financial services. Thirdly, blockchain technology. Explore the application of blockchain technology in the field of inclusive financial management, such as supply chain finance, digital assets, etc., to improve transaction efficiency and security.

MyBank's "Cuckoo" system uses large models to predict the cash flow of SMEs in various industries, thereby providing redemption situation forecasts for bank financial companies, and jointly customizing bank financial products that fit the business cycle of SMEs.

In terms of service model innovation: Online and offline integration to build an SME financial management ecosystem. Firstly, online and mobile. Rely on the Internet and mobile Internet technology to provide convenient and efficient online financial services for SMEs. Secondly, scenario-based and ecosystem-based. Embed financial services into the production and operation scenarios of SMEs, such as cooperating with e-commerce platforms and payment platforms to provide one-stop financial services. Thirdly, build an open and shared SME financial service ecosystem with a financial technology platform as the core. Fourthly, personalized and advisory. Provide professional financial consulting and advisory services for SMEs to help them formulate reasonable financial plans.

The prospects for the development of SME financial management:

Looking to the future, with increased policy support, continuous technological progress, and the release of market demand, the inclusive financial management market for SMEs has a broad development prospect:

Firstly, the market scale continues to expand. With the continuous growth of the number of SMEs and the improvement of financial awareness, the scale of the inclusive financial management market will continue to expand. Some institutions predict that taking the most suitable bank financial products for SMEs as an example, by 2030, its market scale will grow from the current 28.5 trillion yuan to 50 trillion yuan.

Secondly, digital transformation is accelerating. The rapid development of financial technology will promote the digital transformation of inclusive financial management, and online and intelligent services will become the mainstream. Forecasts show that by 2030, 200 million people will buy bank financial products through mobile phones, and artificial intelligence will drive financial companies' revenue to increase by 15%-30%, and costs to decrease by 10%-30%.

Thirdly, the ecosystem continues to improve and enrich. The cooperation between commercial banks, financial companies, insurance, securities and other financial institutions with Internet platforms, technology companies, etc. will continue to deepen, jointly building an inclusive financial management ecosystem.The financial management of small and micro enterprises (SMEs) is an inevitable demand as inclusive finance develops to a certain stage, and it is also an important innovative direction for financial services to support the development of the private economy and SMEs. Of course, it should also be recognized that the innovation and development of SME financial management is a systematic project that requires the joint efforts of regulatory authorities, financial institutions, technology companies, and SMEs. Through continuous product innovation, service optimization, and technology application, there is reason to believe that future SME financial management services will be more intelligent, convenient, and inclusive, providing strong financial support for the healthy development of SMEs, and thus promoting the high-quality development of the entire national economy.