While the world goes around the messaging Apps like WhatsApp and Messenger, China tends to take a different route, preferring WeChat above all the present requisites. Mobile Apps are not created equal in China and according to recent data, Chinese residents use Tencent‘s WeChat; for messaging and voice and video calls, more than anything else.
However, what’s worth noticing here is that the App is not only used simply for social networking and recreation, rather the traders, bankers and the Bond market players use the App to distribute the shares and to solicit the orders!
With WhatsApp being banned (heightened censorship) from the country, WeChat received about 29 percent of all the time spent in mobile apps in China on an average day last month, according to data in Mary Meeker’s 2017 Internet Trends report published on Wednesday (source: CNBC News). With majority of the trading section using the app to share and sign deals and getting other official things done over a text, rather than the more professional email.
Anywhere else such actions are deemed as unofficial and it’s not appreciated to exchange official data and records over some private text.Yet in the world’s second-largest economy the practice is flourishing. Players in China’s $11 trillion bond market use personal accounts on WeChat and QQ; apps owned by Chinese tech giant Tencent Holdings Ltd., for everything from distributing research to soliciting orders.
Although not illegal, yet regulators don’t really praise the idea of using a private messaging app, for one, they have to keep record of the data and the transactions taking place. Hence using WeChat to go about the business and economy could prove fatal and problematic to China in the given case.
The use of social-media tools in China’s financial markets is an “irreversible trend,” said Hao Hong, chief strategist at Bocom International Holdings Co. in Hong Kong. “That being said — for sure there are risks in using WeChat during any deal executions, as a WeChat account is mostly personal and is not regulated.”(source: Bloomberg). A Hong Kong banker just went through the dire consequences, when he was censured by the city’s securities watchdog, for accepting order instructions via WeChat and cell phone.
While WeChat isn’t like the Western apps, Facebook and WhatsApp, because it’s not really a messaging platform, rather it contains several third-party apps. Nearly any organization or company can make an app, known as an official account, on WeChat; media companies, banks, celebrities, brands, and startups all have their own accounts. Individuals with accounts can access APIs for features like direct messaging, voice messaging, payments, and location.
Therefore, China using the App for professional reasons is a bit confusing. Although it has its way of checking and ensuring privacy of the content and the policy about the message record keeping, but to what extent they apply to WeChat is not really clear.
So what’s the reason behind China relying on the App? According to the chief operating officer at Shanghai Yaozhi Asset Management Co, Wang Ming, WeChat is more efficient to reach people. They form groups on the App and share news and research. Hence when they want to borrow or lend money or to sell a certain bond, they publicize it on the group. The interested people can then have a private chat.
Besides the spreading of news and research, rumors often appear at the groups, hence you have to be careful. The information can be put to good use or perhaps used against one to trap them in a vicious hole. While this goes on, certain companies are totally against the idea of using private message apps for doing business. Alex Bouchardy, head of fixed income for Asia at Credit Suisse Asset Management, says:
“While the technology is facilitating the capital markets a lot, you still need certain processes, mechanisms, principles and compliance in place to account for trade confirmation settlement,” he said. “If you missed a trade, how would you tackle that?”