Visitors seek information about financial products at a finance expo in Shanghai. [Zhou Dongchao/For China Daily]

Wealth management and quick returns assume significance in digital-age financial services

The online wealth management products are growing in appeal for younger retail investors, filling a gap in financial services created by the inadequacy of traditional banks and stock markets in certain respects, experts said.

According to a report on wealth management products and demographics by 51 Credit, a fintech company, people aged between 21 and 30 account for over half of its 70 million users.

Some 62 percent of its users earn 3,000 yuan ($500) to 8,000 yuan per month.

Short-tenure investment products are popular－55.5 percent of users are willing to buy products with a tenure of one month or less.

"The online wealth products market has eliminated the restriction on time and space, and also lowered the bar for small investors to enter," said Neil Wang, president of Frost & Sullivan for Greater China market, a global researching and consulting company. "It provides accessible products to the main users of the internet, the young generation."

According to the report, people of this age-group desire to boost their wealth in a safe, convenient way with lower entry barriers and rewards over the short term. Thus, compared to stock markets and real estate, affordable alternative investment products have attracted much attention.

Among 51 Credit's products, 48 percent of investment ranges from 10,000 yuan to 100,000 yuan, and the average investment is 45,700 yuan.

"Although bank's wealth management products have better interest rate, they have a higher minimum investment requirement of at least 50,000 yuan," said Wu Jiali, a bank account manager.

"For some online products, the minimum requirement starts from 1 yuan. Also, users are able to manage their investment anytime as long as they have an internet connection. In contrast, banks have strict working hours even for online services."

Wu said another benefit of online wealth management products is the variety they offer. Profits are generated online over years or in less than a month, which gives the users more flexibility on their assets.

Neil said new regulations on online financial services released last year by the government have also increased the popularity of such products, creating a sense of security.

According to the Chinese Salary Report published by the Chinese Academy of Social Sciences, 11.5 percent of the Chinese surveyed showed willingness to invest in online products. With the average salary almost tripling from 2004 to 2015, the market for online wealth management products will soar to 16,740 billion yuan in potential sales or investments, with a growing number of young people looking for alternative investment options.

That could also pose challenges to both the traditional financial services sector and the fintech industry.