Development Research in China's Banking Personal Financial Services-中国银行个人金融服务的发展研究
03-25, 2014
ABSTRACT
摘要
In this paper, the status quo of China's commercial banks, personal finance, compared to developed countries and regional development overview, statements of China's problems, to find out the constraints, the final solution to the problem put forward countermeasures.
本文针对我国商业银行个人理财现状，对比发达国家和地区发展概况，陈述我国存在的问题，找出其制约因素，最后提出问题的解决对策。
本文针对我国商业银行个人理财现状，对比发达国家和地区发展概况，陈述我国存在的问题，找出其制约因素，最后提出问题的解决对策。
This article first made a personal finance overview, describes its theoretical foundation, the right are defined. Then the paper introduced the circumstances that commercial Bank of China carry out personal financial services, and analysis of its development trend. Against our current situation, analyzes problems in China's commercial banks to find out the reasons leading to such problems and put forward China's commercial banks to develop personal wealth management business solutions.
文章首先作了个人理财的综述，阐述了其理论基础，对之进行了定义。然后介绍了我国商业银行开展个人理财业务的具体情况，并分析了其发展趋势。针对我国的现状，分析我国商业银行存在问题，找出导致这些问题的原因，提出我国商业银行发展个人理财业务的对策。#p#分页标题#e#
文章首先作了个人理财的综述，阐述了其理论基础，对之进行了定义。然后介绍了我国商业银行开展个人理财业务的具体情况，并分析了其发展趋势。针对我国的现状，分析我国商业银行存在问题，找出导致这些问题的原因，提出我国商业银行发展个人理财业务的对策。#p#分页标题#e#
After this analysis found that China's commercial banks in the external environment and self-management such as marketing technology, product innovation and quality of personnel in areas such as inferior, has hampered China's commercial banks to conduct personal financial business. For the above, the authors make the corresponding recommendations in response. This paper mainly from commercial banks on how to develop their own point of view that commercial banks should learn from China's experience in marketing, systems, hardware, and so improvements to personal finance business running smoothly.
本文经过分析发现，我国商业银行在外部环境和自身经营管理如营销技术、产品创新以及人员素质等方面存在劣势，制约了我国商业银行个人理财业务的开展。针对以上情况，作者提出了相应的建议对策。本文主要从商业银行自身如何发展的角度，认为我国商业银行要借鉴经验，在#p#分页标题#e#营销、制度、硬件等方面改进，以便个人理财业务的顺利开展。
本文经过分析发现，我国商业银行在外部环境和自身经营管理如营销技术、产品创新以及人员素质等方面存在劣势，制约了我国商业银行个人理财业务的开展。针对以上情况，作者提出了相应的建议对策。本文主要从商业银行自身如何发展的角度，认为我国商业银行要借鉴经验，在#p#分页标题#e#营销、制度、硬件等方面改进，以便个人理财业务的顺利开展。
Key words: personal finance; customer relationship management; differentiation; separate operation
Development Research in China's Banking Personal Financial Services
中国银行个人金融服务的发展研究
1. Introduction
1.引言
1.引言
1.1 The Analysis of the Background of Personal Financial Services
With the end of China's transition period of accession to the WTO, foreign Banks fights to get into our market, banks both in China and abroad are contesting to control the market of Personal Financial Services business. Our banks will face serious market test, Personal Financial Services, has become the new profit growth point that domestic and international financial industry pursue by. Especially in recent years, the capital market develop rapidly, financing channels for enterprise increase ceaselessly, after interest rates become market-oriented gradually, commercial bank deposit and loan interest rate will drop substantially, increase in source of Personal Financial Services business profits have become the focus of the development of banking business[1].
In the point of international view, since 1980s, on the one hand, personal wealth and financial market development the growth rapidly, so people have created enormous financial needs; on the other hand, with the homogeneity of banks’ financial products, the strategy to push out advantage service has become more important, banks are required to provide customers with more comprehensive services, simpler and more specific investment tools and combination. In this context, personal financial services came into being as a new banking. The new business first appeared in the United States, and then developed rapidly in Europe and Japan, Hong Kong and other developed countries and regions, and now has become an important business of the world's major banks. In the past few years, the average annual profit margin of the U.S. banking Personal Financial Services has been up to 35%, the average annual profit growth rate has been about 12-15%. From the perspective of Personal Finance Service development trends in developed country, Personal Financial Services has advantages such as high-volume, low-risk, wild business scope and stable income, it takes an important part in commercial banking development. In western countries, Personal Financial Services has almost got into every family, the business income has accounted for 30% of the bank total income; in Hong Kong, the personal financial management services becomes the focus of banking competition in recent years, not only small and medium banks expand the customer group actively, HSBC, Standard Chartered, Hang Seng, Bank of East Asia and other big banks have also join the game, they promote the Personal Financial Service to higher level, by provide different financial services for different customers. In short, in today's commercial banking business, Personal Financial Services is playing a more and more important role, it has become one of the key factors of competitions between commercial banks, and it is internationally respected by commercial banks as an important part of high-profit business of a commercial bank.#p#分页标题#e#
In our country, as China's economy develops continuously, Retail Banking is running well currently. The people's living standard is increasing, people’s market demand for varieties of financial services and capital appreciation is gradually increasing; wholesale Market with enterprise service object has become ripe and saturated, profits are declining, while Personal Financial Services with individual families and private property owners subject become a effective method for modern commercial banks to occupy the market and Increase profits; at present, more and more foreign banks have moved into the Chinese market, they have perfect service systems, advanced technical means, proven management system and abundant capital strength, , the strategy they take to enter the domestic market is no doubt competing for market share of domestic banks. In the living environment, banks have to find new profit source[2].
In China, personal savings that residents have are above 60% of total deposit, the one who seize the initiative of personal financial planning business will occupy a strong competitive position of the banking sector. Therefore, the personal financial management gradually becomes one of the main fields of China's banking products and services competitive innovation. At present, however, China's banking industry current management methods and management tools are still depend on traditional business, its pace of does not match that of market expansion and new business, active market personal financial services, and new instruments need to be established. While the effective choices are improving financial services and constructing efficient marketing system, the importance of commercial banks Personal Financial Services integration, development and innovation is increasing. It can not only promote changes in the commercial banks’ economic function, but also contribute to bank assets, revenue and customer structure optimization, enhance China's commercial banks more competitiveness.
1.2 Research methods and structures
Since the reform and opening up, China has been developed gradually, rapid and healthy, People's willing to invest and modern financial management concepts are increasing, people’s demand for diversified financial services is also increasingly, The development of Personal Financial Services has become priority of commercial banks in the development. The paper analyses market environment that China's commercial banks to develop Personal Financial Service and the gap between services of Domestic commercial banks with similar activities of foreign commercial banks. The paper referred Economics, Information Technology Research Theory and Management Engineering Theory, and give some practical suggestion and strategy for Chinese commercial banks to develop their Personal Financial Service.
The basic framework of the article is as follows:#p#分页标题#e#
The introduction introduces the Writing Objective, structure and Innovations of this paper.
In the first part, the paper described Personal Financial Service briefly, introduced the general theory of commercial banks’ Personal Financial Services
In the second part, the paper introduces the developing process, market environment and system of Personal Financial Services, and analyses problems in Chinese commercial bank’s Personal Financial Services.
In the third part, the paper researched the strategy and tools for Chinese commercial banks to carry out Personal Financial Services.
2. The Theoretical Basis for Commercial Bank Personal Financial Services
2.1 Family life-cycle theory
Family life cycle theory is an important theory of economics, which based on a basic fact that family in different stages of life will have different behavior.
The division standard of different stages in family life-cycle theory is determined by the parents’ average age and the elder child’s age that lives together, taking into account life-cycle and financial investment capacity[3]. The basic family life cycle model is generally expected to go through six stages: newly wedding stage, infant and young children stages, school-age children stage, mature stage, rich stage and empty nest stage. In the six stages, customers have following basic characteristics:
Newly wedding stage: young couples, no children, almost no economic burden, they are leaders of the new consumption concept, with entertainment-oriented purchasing, and almost no willingness to save.
Newly wedding stage: young couples, no children, almost no economic burden, they are leaders of the new consumption concept, with entertainment-oriented purchasing, and almost no willingness to save.
Infant and young children stages: young couples, with children in age 1-6, they like popular and fashion, they are reckless in consumer decision-making, and willing to take risks in the investment process, they like to make decision themselves.
School-age children stage: young couples, with children in age 6-18. They have better economic conditions and pay attention in saving. They focus on high-grade commodities and investment in education. They would like to take suggestions of the experts, do some short-term and new investments, and tend to discuss with friends.
Mature stage: Middle-aged couples live with 18-25 years old Dependent adult children. They still have good economic conditions; wife and children have their own works. They value family life, and like to pay more time with their family. They pay much attention on diet and like the healthy, active lifestyle. They focus on savings and use professional financial management expert. They have knowledge of professional finance and investment and are good at avoiding investment risks by using risk instruments.
Rich stage: Middle-aged couples, their 25 years old or older children have been independent. They focus on career success, and take the amount of wealth as an important measure of success criteria. They are good at make plans and decisions. Their favorite investment goods are estate, and tend to invest on the long-term value-added collections, gold jewelry, national debt and corporate bonds with less risk.#p#分页标题#e#
Empty nest stage: Elderly couples; children live family and have their own children. They have high incomes in the beginning and after Retirement their incomes decrease. They are careful in investment, think stocks and share riskful and pay attention on avoiding risk.
Commercial banks, according primary financial management personality of each type of customers including financial values and financing behavior characteristics, can design perfect personal financial planning for not some stage but the customers’ whole life, including Analysis of assets and liabilities in each stage of family life cycle, budgeting and management of cash flow, Personal Risk Management and Insurance Planning, establishment and implementation of Investment objectives, Career Planning, child rearing and education planning, residential planning, retirement planning, Personal Tax Planning, Estate Planning and so on.
2.2 Portfolio Theory
The portfolio, which was proposed by Harry Markwoitz in 1952, is generally thought to be the origin of modern finance and base of Personal Financial Studies. This theory took Finance from qualitative methods to quantitative methods[4].
The main idea of Portfolio Theory is to resolve some of the risk by diversification. Special meanings of Portfolio Theory is how to get portfolio securities positions, including long and short, to get the best tradeoff between investors’ return and risk. General meaning is to make decision on the composition of all the assets and liabilities, even including the investment of human capital (for example, education and training).
When commercial banks provide personal financial services to the customers, they are no doubt helping customers reduce risk and increase revenue as much as possible. However the theory tell us that, When the investment portfolio contains many types of risky assets, variance (risk) of individual assets the will not work. Non-systematic risk can be eliminated by expanding the portfolio (the increase in the types of assets included) for risk diversification; systemic risk can not be eliminated. Two fund separation theorems which were developed from the Portfolio Theory teach Personal Finance Account Manager that, if one can find two different well-run stock or fund, and invest on them according to a certain percentage, he can eliminate non-systemic risk. This conclusion is undoubtedly of great importance in the investment strategy for the development of personal finance.
2.3 Capital Asset Pricing Theory
CAPM-Capital Asset Pricing Model was proposed separately by William Sharpe, John Lintner and Jan Mossin in 1965, it stands for the analysis of finance to get mature. Its core content is the capital market line theory. The portfolio, which is represented by the tangent between Capital Market Line and effective combination of boundary of risky assets, is the market portfolio of risky assets.#p#分页标题#e#
It could be easily found that no matter how income and risk preferences of investors are (no matter how the shape of the curve of the utility function), the point which is faster above straight line, have the larger value of its utility[5].
To the financial institutions which are engaged in personal financial business, no matter how income and risk preferences of investors are, they could provide all investors the best investment plan by just finding all Risk Portfolio that tangent M stands for, coupled with risk-free securities, and share of Risk-free securities in the portfolio will show income and risk preferences of investors. Thus, it is possible to provide customers with personal financial investment products.
2.4 Behavioral Finance
In traditional finance theory, it is supposed that investors are rational and risk-averse, and the market is balanced. In this investment environment, Investors are always supposed to make consistent, accurate and unbiased risk prospects, and investor’s behavior is always rational. However, researches in the late 20 years showed that, Market Hypothesis which is based on rational investors has defect. Scholars represented by Schiller, Yale University, believe that investors are "non-fully rational".
Behavioral finance theory is a discipline that the finance and human behavior cross its edge; it made clear how the market participants’ psychological factors works in the decision-making,behavior and the market pricing, more suit the actual situation of the financial markets. For the purposes of Personal Financial Services to carry out, the emergence of behavioral finance theory provides practical guidance in carrying out the Personal Financial Services.
3. Analysis and Research in Personal Financial Services of China's Commercial Banks
3.1 History of China’s Personal Financial Services
China's domestic commercial bank Personal Financial Services has long been limited to single, traditional commercial banking business such as savings. Since reform and opening up of China, people’s personal disposable income and wealth has been increasing, domestic financial markets are improved continuously, individuals are no longer satisfied with the funds deposited in the bank, they need diverse invest channels to make personal assets Maintenance and appreciation. Driven by this demand, China's domestic personal financial business started in the mid of 1990s.In detail, there are following stages in development of the domestic personal financial business[6].
Phase 1: The embryonic stage of personal financial services. At this stage, China Merchants Bank firstly in China launched the "One Card" the multi-account individual payment and settlement tool which set local and foreign currency in one. it structured the personal financial services platform. Subsequently, the Industrial and Commercial Bank of China Shanghai Branch was introduced to the public of financial consulting that includes design, certificates of deposit as security for loans, foreign exchange trading and other content, including more than 10 financial services in 1996.#p#分页标题#e#
Phase 1: The embryonic stage of personal financial services. At this stage, China Merchants Bank firstly in China launched the "One Card" the multi-account individual payment and settlement tool which set local and foreign currency in one. it structured the personal financial services platform. Subsequently, the Industrial and Commercial Bank of China Shanghai Branch was introduced to the public of financial consulting that includes design, certificates of deposit as security for loans, foreign exchange trading and other content, including more than 10 financial services in 1996.#p#分页标题#e#
Phase 2: the initial stage of personal financial services. At this stage, domestic commercial banks f began to develop appropriate institutional framework guarantees or personal financial services in the organizational system. CITIC Industrial Bank firstly in Guangzhou branch established a private banking department in 1996, and provides personal savings of 10 million CNY customers enjoy a number of the bank to provide financial advisory services; in 1999, China Construction Bank opened a personal finance center in 10 City including Beijing, Shanghai, etc.
Phase 3: The development stage of domestic personal financial services. At this stage, domestic commercial banks began to focus on their financial business, brand building and increase the personal wealth management business building efforts. In 2000, the Industrial and Commercial Bank of China Shanghai Branch was set up by Yang Shao-min and six employees were named outstanding finance personal finance workshops; in 2001, Agricultural Bank of China introduced the "golden key" financial supermarket to provide customers one-stop financial services; in 2002 , the bank launched "Happy Alone" personal finance brand-building[7]. That same year, Industrial and Commercial Bank of China launched the "Elite Club Account", China Merchants Bank launched the "Golden Sunflower" personal finance brand.
Phase 4: The high speed development stage of Domestic Personal Financial Services. At this stage, major domestic commercial banks have launched their own financial services brand, while the personal finance channels further were enriched, the scale of their assets quickly to enlarge. In 2003, major domestic commercial banks, including Bank of Communications, Shanghai Pudong Development Bank, China Minsheng Bank, and Guangdong Development Bank Deng Jun launched their own brands of financial management; while banks have also launched their own foreign exchange financial products, electronic banking, Internet banking and other new financial management approach has also been rapid developed.
Phase 5: monopolistic competition stage of domestic personal financial services. At this stage, domestic commercial banks to further strengthen their brand-building and the cultivation of core competitiveness and through customer segmentation implemented its own monopolistic competitive strategy. After 2004, all commercial banks started to improve their own personnel and financial management for enhancing their core competitiveness and creating financial brand. Among them, Industrial and Commercial Bank of China started his personal financial management core competencies to develop and manage projects in late 2003, it provided customers with comprehensive workflow advantages of financial services in accordance with international financial management centers, the project is currently running in its banking centers; In addition, for improving service quality and its ability to finance R & D needs, domestic commercial banks now have to further strengthen its financial management staff team-building and competition; at the same time, some commercial banks including China Merchants Bank and other banks had begun to implement the VIP customer stratification and differences in the provision of financial products, such as China Merchants Bank, in its financial payment accounts for the high-end customers based on the introduction of the Sunflower Card Banking customers a high-end products, so that achieve bank stratification and differences in customer service, maintenance[8].#p#分页标题#e#
3.2Environment and related systems analysis in personal financial services
The continued growth of personal wealth laid the foundation for conducting personal financial service
In recent years, as domestic economic developing and residents personal wealth rapidly growing, laid the foundation for development of personal finance services. The personal assets growth of the residents can be realized through the following two indicators: financial institutions in rural and urban savings balance change, and urban and rural households’ changes in per capita income index.
In recent years, as domestic economic developing and residents personal wealth rapidly growing, laid the foundation for development of personal finance services. The personal assets growth of the residents can be realized through the following two indicators: financial institutions in rural and urban savings balance change, and urban and rural households’ changes in per capita income index.
b. Financial markets greatly increased the importance of the residents’ asset management
Domestic financial markets in-depth process of asset management increased the need for individual residents. The financial market means that in market-oriented environment, the prices of financial products and income will no longer be in the long-term fixed level, but changes in supply and demand constant adjustment as the financial markets, the above changes, increases future prices of financial products and income uncertainty.
c. Changes in the social security system increases the need for planning personal wealth
The process of the domestic market, not only reflected in the financial markets, market-oriented, but also reflected in other aspects of social systems. Such as social security system changes that have occurred.
With the reform of urban enterprise workers’ social security system, implemented in the past, with a long-term welfare of protection model has been the transition to social insurance-based security model, pension, medical care, unemployment and other projects have reached a certain proportion of an individual's contribution. Change in funding by the government or business is fully committed to a single mode, the transition to the Government, enterprises and individuals co-financing approach. In addition, the level of protection provided social insurance is relatively are limited, therefore, a more comprehensive and extensive security projects need to be paid by individuals commercial insurance. From the change of personal security system, the individual security system has changed from the original simple beneficiary to part of the participants’ personal security system (social insurance), or full participants (commercial insurance). Therefore, reasonable "planning and allocation" requirements in personal funds increased[9]. Changes in the social security system and increased the need for planning the assets of residents.
d. Deepening of labor socialization division make professional Personal Financial Services to become the development trend
Market-oriented economy brought about the effect of increasing specialization of society level on the other hand. In a market economy-based environment, because deepens of specialization, more and more individuals are divided, the professional and personal work has been restricted to a limited area of expertise, and this trend increase with the deepening of market-oriented aggravated. In addition, the financial professionals involved in stocks, funds, insurance, bank deposits, real estate and other aspects of the integrated financial expertise, therefore, intensified the demand for financial services professional.#p#分页标题#e#
Though the analysis above, it can be found that for investment banking products and services, there is a huge domestic market demand, and this demand will increase further as the market-oriented in-depth.
3.3 Status and Problems China's commercial banks’ Personal Financial Services
3.3.1 The status China's commercial banks to carry out Personal Financial Services
Since 1995, China Industrial and Commercial Bank of China Shenzhen Branch set up a "Financial Department" for the first time the bank introduced the concept of financial management in China; China's commercial banks began to explore personal financial services[10]. However, Personal Financial Services, did not receive enough attention, just as the middle part of the business, as traditional business auxiliary services. In recent years, by the increase in personal assets of China's population, the personal finance demand is growing; the rapid development of China's financial markets, the traditional commercial bank "disintermediation," the phenomenon is growing, as well as China's Central Bank cut interest rates eight times, commercial banks savings and credit business profit margins smaller and other factors, China's commercial banks, personal financial services has been rapidly developed, and become one of the fastest-growing businesses China's commercial banks, it shows mainly in the following aspects.
a. With competition Increasing, Personal Financial Services become the business banks will focus in next stage.
From the competition level, China's commercial banks’ Personal Financial Services is divided into three stages: the initial stage of competition is to see who conduct business varieties; the second stage of competition is the integration of different kinds of operations, and to its name appears in the image of a unified front of consumers; and the third phase of the initiative is to find and create difference, create branding services.
In the initial stage of the competition, personal financial service has been noted by commercial banks. Commercial banks frequently reveal their new tactics in order to win their own development, continuous introduce new services. However, one indisputable fact is that banks in the product type, structure and service functions are often similar. At this time, personal finance brand was born. Simply, personal finance brand is related to a variety of commercial banks to combine personal financial products, with a unified name to refer to in order to facilitate consumer acceptance.
Fierce market competition in China's commercial banks promote personal financial business development, personal finance has been not simple just a cup of tea, a smile, a few products, it is not only integrate different kinds of operations, or superficial unified naming, Commercial banks are required to enable customers to benefit through professional valuable information, so as to truly reflect the essence of financial management. Commercial Bank Personal Financial Services, has entered the era of personalized, different levels service, financial management more user-friendly, the brand highlights the diversity, individual banks were in accordance with their customers, brand, network and human resources advantages, to build personal financial services with their own characteristics .#p#分页标题#e#
b. Personal Financial Services become the business that next stage China's commercial banks will focus on
"Domestic profits of personal finance market had reached 3.1 billion U.S. dollars by the end of 2002, while in 1997 the figure was only 1.5 billion U.S. dollars." Jiang Jian-qing said, who the president of Industrial is and Commercial Bank of China. Some experts predict that the annual revenue of China's future personal financial services will reach 7 billion -100 billion dollars. The prospects are so attractive that financial institutions come to it immediately; domestic commercial banks have launched their own brand of personal finance channels to expand and develop its own financial advisers. Foreign banks such as Citibank Financials "VIP Money", HSBC's "Premier", Bank of East Asia's "Supreme Gold" and so one after another appeared in the financial market of China Beijing, Shanghai and other developed areas[11].
c. Personal financial services business model change from scattered to unification
More than 10 years ago, some commercial banks launched personal financial services such as financial management workshops, financial advisors and other forms, but most of them in the spontaneous phase, lack of a unified brand and strategy. After a period of exploration and practice, banks all took to the road of a unified operation.
3.3.2 Problems in the China's commercial banks Personal Financial Services
China's Commercial Banks, Personal Financial Services Although have achieved a certain degree of development, but currently only stop at providing customers with financial advice and recommend financial products, in general, China's commercial banks, Personal Financial Services is still in its early stage. Outstanding performance as "needs more practical less; errors and more channels for less; the concept of multi-product less; restrictive and profits less" such as "more than 4 four little" problem:
a. The market demand a lot for personal finance and Chinese banks provide limited personal financial services
According to market research, more and more urgent need for financial customers "one-stop" service, however, survey to population in the Beijing Shanghai Shenzhen Nanjing the four high-income found that only 10% of people choose to find the professional Financial adviser or stock Brokerage consulting division, others 85% preferred to seek the views of the relatives and friends. Many of our customers said that from the concept of financial analysis, banking, securities, insurance, the role of the three different emphases, different from each other, as the three pillars of customer's personal assets prop up the sky, but in actual operation, the advantages of the three did not effectively integrated. Overseas, the banking, securities, funds, insurance, etc. are often a number of subsidiaries under the same parent company, the information flow and business between complementary and able to provide customers with the first cycle of services. In China, the implementation of separate operation, the banking industry does not allow involvement in securities, insurance, fund, while the RMB interest rate and almost no room for maneuver. How to effectively cross industry barriers, effective combine three financial instruments, will become a major issue in financial business development[12]. This is the only possible breakthrough to facilitate their clients and to minimize risk, get the largest return, and Chinese banks can truly compete with foreign banks in personal financial management.#p#分页标题#e#
b. There are a lot of errors for individual customers in financial management and Chinese banks to provide insufficient financial management channels
The Individual customers’ first erroneous idea is quick success. At present, many commercial banks have set up financial management workshops for clients customized financial plan tailor can come to almost every customer: The first sentence is "how much of my money to be able to value-added" or "how high rate of return you can give me ". This is clearly not a "financial", but "make money." The goal of personal financial service is to help each one of us have rich content and beautiful life of life experience. According to the definition of U.S. CFP Board's, personal finance is process which formulates the rational use of financial resources, to achieve personal goals in life. Financial experts of Industrial and Commercial Bank in China Shanghai explained that the core of financial is reasonable allocation of financial assets and income, not only to consider the accumulation of wealth, but also to consider the wealth protection. In this sense, the connotation of financial have more means than just "money begets money" in personal investment. The second error idea is too conservative. Now, despite the stock market investors have been tens of millions, investment team in bonds, foreign exchange markets has become larger, but there are still a lot of people who stick with the only way of managing money - saving money. It is true that in many finance and investment method, the savings are minimal risks, and its benefits are the most stable one. However, the central bank cut interest rates together with increasing interest tax, and foreign currency deposit rates downward, has made the increase in deposits value of personal assets is virtually impossible; when inflation, the bank's personal assets will be invisible "shrink." Moreover, money in the bank is only on an empty digital passbook, it does not have the stocks, the Fund's investment functions, or insurance support functions. The third error is insisting exhaustive. Stocks, bonds, foreign exchange, gold, insurance, personal assets average or not evenly distributed in each investment channels, which is now pursued by a lot of people manage their money. Exhaustive style of financial management, certainly helps to spread risk, but individuals do not have enough energy and attention to each market trends, no professional financial adviser to manage, the results may be not make money anywhere, and even have the dangerous of impairment of assets. To get rid of these three major errors, Chinese banks should provide personalized financial channels. However, due to start-up time is short, and our country's financial sub-sector regulatory restrictions, the Chinese-funded banks currently haven’t strong targeting in the financial channel.
c. Chinese-funded banks propose many concept of personal finance but develop a few products#p#分页标题#e#
Many experts in Chinese banks’ finance and investment division admit that China’s banks are currently lack of good personal finance product. While some "financial supermarket", "Personal Finance Center", "Financial Workshop" claims that can offer savings, insurance, funds, bonds, housing, credit and other "one-stop" services, tailor-made investment portfolio of various programs, but the actually it has not enough support for personal finance products, individual banks launched a professional financial advisory services and portfolio recommendations were also just stay in shallow and does not allow customers to realize the purpose of personal finance [13]. In recent years, some securities companies, investment trust management consulting firm and the introduction of investment-linked insurance even have the Phenomenon "the more reasonable the more losses," it greatly undermined the credibility of personal finance and investment.
d. Chinese banks conduct personal financial business are Snobbish, but don’t much effective means of capital appreciation for the VIP customers
According to "28 rule", banking more than 80% of the profits is from 20% of the high-end customers, that 20% of the customers become a bank's "instant hit." As for the definition of high-end customers, is currently Minsheng Bank VIP Money "threshold" is the annual average daily amount of deposits and POS consumption of 10 million; China Construction Bank VIP banking services, the average monthly deposits to reach 50 million, and to go through a year assessment period; ICBC "financial gold account" require customers to various deposit and loan balances (excluding individual housing loans) reached 20 million CNY, of which deposits is not less than 10 million; to become the "Golden Sunflower" fiscal VIP customers of China Merchants Bank, one need to have to 500,000 CNY. In addition, some banks also divide VIP into different levels, such as CMB divide the "Golden Sunflower" VIP card into three levels, from high to low followed by VIP card, VPI, and VPI Diamond Gold, diamonds, cards for three months average daily balance of deposits not less than 30 million, Gold deposits of not less than three-month daily average of 200,000 CNY. These requirements are difficult for ordinary working-class prices. At present, banks in the 20% of the high-end customers and financial services are: payment of various fees, insurance, on behalf of convertible bonds, bank transactions monthly bills on a regular basis to provide domestic and international economic situation and monetary policy, stock market and other information, and provide financial advice books, the clients to the bank business and enjoy priority service courtesy, from account manager to provide "one-stop services". While the bank demonstrated a high level of enthusiasm for high-end customers, but these customers don’t satisfy with the services. At present, banks can not fully manage the individual assets, namely, trust management are also subject to policy constraints, banks can not split the assets for clients and investment, therefore, the majority of VIP financial services just stop at the "Proposal" and the "program", that is staying at the level of consultation, rather than operating on behalf of clients and can not provide customers with real value-added services[14].#p#分页标题#e#
There are also many customers who have saving more than the 200,000. These customers are mostly loyal bank customers, and they trust banks. in the current low interest rates situation, there are almost no other value-added channels, and they lack of sufficient expertise or sufficient time to personal financial management, they are looking forward to banks help to achieve more substantial value-added, and they are also willing to take risks, but the threshold of China’s banks personal financial services is too high, this makes these small and medium customers disappointed.
4. Strategy in China's commercial banks to develop personal financial services
4.1 Build a good external environment for the development of Personal financial services
4.1.1 Under the premise of "mixed business, sub-sector regulators," accelerate business development of personal financial services in China
Mixed is the trend of China's financial industry. From the Mixed to separate operation, to the financial industry to refocus and explore Mixed shows that China's financial policies, but also change as the situation changes. The regulatory authorities have clear understanding of the situation, the work is under way. However, the banking, securities and insurance sub-sector operation and regulation of the situation, had lasted for many years, "mixed business, sub-sector regulators" might is the way to China's financial industry Mixed.
4.1.2 Expedite the development of China's Commercial Banks Personal Financial Services in the financial holding company model
In the financial holding company Model to speed up development of China's commercial banks personal financial business, on the current position, on the one hand is to strengthen the financial institutions in the personal finance business cooperation. Regulators should recognize that China's commercial banks in various financial institutions in the lead role, give full play to commercial banks in the channel, human resources, customer resources, advantages, strengthen commercial banking, Personal Financial Services and other financial institutions, financial services cooperation, increase the financial institutions, mutual understanding of the opportunities for the establishment of professional all-round financial holding company in preparation. On the other hand, it is necessary to develop appropriate incentive policies to encourage commercial banks and other financial institutions, our combined strengths complement each other to form a financial holding company for China's commercial banks to the development of personal wealth management business to create a more relaxed macroeconomic environment.
4.1.3 Eliminate regulatory discrimination of joint-stock banks and city commercial banks#p#分页标题#e#
At present, China's financial regulators for the commercial banks of China's regulation of personal wealth management business there is a serious act of discrimination. For some personal financial business, to carry out, the four major state-owned banks are often the first to be allowed, while the medium and small joint-stock commercial banks and city commercial banks are often not in the considered range. For example, the early were allowed to carry out the structural foreign currency deposits, in early 2004 to be approved by the central bank and China Banking Regulatory Commission, only the ICBC, BOC and China Construction Bank. But in fact many banks are making foreign currency deposits, while the application is approved, while making a business; after all, demand calls for the market supply, market discipline make the regulatory requirements to become a dead letter[15]. Regulators should eliminate regulatory discrimination to joint-stock banks and city banks personal financial services, so that more small and medium sized commercial banks could join the competition in the personal financial services.
4.1.4 Strengthen patent protection for innovative products of China's Commercial Banks’ Personal Financial Services
All along, the financial sector have so-called "financial products have no patent", it is difficult for the banks, like industrial enterprises, to keep long-term competitive advantage by some patents. In modern times, with the development of technology and changes in the way financial services, as well as the degree of openness of financial markets continues to improve, automated teller machines, telephone banking, online banking, bank cards and other new channels and new products are widely used, which breaks through the traditional business model, expanding the scope of the bank to operate efficiently, increasing the market information flow. Banks in the global financial markets more competition, for the protection of financial product innovation is also more difficult. To reduce the imitation, to avoid vicious competition, it is necessary to use intellectual property protection methods to improve the cost of latecomers, and increase benefit of innovation.
4.1.5. Establish evaluation system for individual customers
The lack of effective customer evaluation system is not conducive to commercial banks to carry out Personal Financial Services, particularly for personal consumer credit business. To solve this problem, commercial banks can start from the following aspects.
First of all, banks are to establish a centralized, unified personal customer information file system. Should make full use of banking information processing systems, personal financial services from a development point of view, for savings, credit cards and personal loans for consumer credit and other information-based integration of natural and enrich personal customer information, and standardized management information. At the same time, strengthen the collection of information in the industry information and other bank customers, and continuously enrich the existing customer information systems, so that not only includes information on existing customers, but also into the prospective customer or potential customer information in order to adjust the development of individual customers.#p#分页标题#e#
Secondly, banks should accord to the established personal customer information files to create a personal assessment of customer credit rating system. Information based on individual customer profiles, the banks can be a different standard will be divided into different types of customers to provide differentiated services at different levels, form a pyramid structure of personal financial services clients.
Furthermore, banks need to establish individual customer credit risk management systems. And other banking services, like personal financial services are also at risk, in particular the risk of personal consumer loan business is still very large, so a person will begin to make good credit risk management. First, we must establish and improve rules and regulations, constraints, individual customer behavior; Second, we must strengthen banking supervision and inspection of their own to prevent the internal management and lax; 3 to make use of scientific and technological means to prevent risks, such as high-risk individuals for consumer credit, the establishment of personal consumption loans bad debt management system in order to increase the supervision of non-performing loans; Fourth, we must increase the collateral and guarantees intensity to shift part of the risk.
4.2 Improve the internal mechanisms that promote the development of personal financial services
4.2.1 Measures to be taken in financially marketing perspective
Implement differentiated strategy of services
Market segmentation for customer should not only to distinguish between different value-added consumer needs, such as hedge type, sound type, or the risk of type and so on, but also analysis of their social class, property size, income characteristics, credit levels, risk tolerance, purchase behavior and habits, and thus the market is divided into several levels of consumer groups, and different levels of customers to provide suitable services to their needs, so that banking services change from the same technology and popular to the hierarchical and professional, in order to achieve "differentiation services".
4.2.2 Strengthen the innovation of personal financial services
The rapid development of Personal finance services is inseparable from financial innovation. First, banks should continue to improve services, and innovative products to "meet" customer demand. But more importantly, the bank should go through continuous innovation, "lead" market demand, the concept of the bank in the market to go in front of the bank's product design, customer appetite for the first change. Banks respond to the market a keen insight on the industry trends are forward-looking and accurate forecasting capabilities, by analyzing the customer's potential demand and market trends to create a marketable financial products, providing customers with "six-appropriate" services that "at the appropriate time, with the appropriate way and the appropriate price, to the appropriate customers, selling appropriate products, receive the appropriate effect."#p#分页标题#e#
4.2.3 Implement brand strategy in Personal financial services
Commercial banks should strengthen their financial services products, brand building. Brand is the enterprise survival and development of the country. Bank as a special enterprise, but also the psychological need to build to meet the customers’ financial brand, because good brand image has a subtle special effect in the bank's operation and development.
4.3. Measures to be taken from perspective of bank composition
China's commercial banks to achieve innovation and development in personal financial business, must use the right strategy, consolidate the traditional business, strengthen weak business, open up new business, in order to achieve balanced development overall.
4.3.1 The traditional business need to be consolidated - the retail banking business.
Retail banks and the residents of the basic necessities closely related to everyday life, mainly rely on network, ATM, mobile phones, the Internet and other channels of banking services available to provide daily financial services, this is the advantages of domestic banks. Domestic banks can optimize the process design, reduce operating procedures and processes, access to lower costs, improve efficiency, and achieve economies of scale capacity. From the human life-cycle perspective, the retail banks are allowed since a young age period can stay with for life. Therefore, once the relationship between customers and banks to establish accounts, as long as banks can continuously provide follow-up of consumer credit, investment products, while maintaining good customer, you can lock the customer, reduce operational and customer attrition rate.
4.3.2 The traditional business can be focus on - consumer credit
Housing credit and automobile credit is the main products of consumer credit, which could bring banks to a higher steady income. As long-term credit products, customer and banking relationships, once established, will be a long time. As the housing loans, car loan repayment from the customer in the bank's depositors or credit or debit households, with the network, ATM and other channels of retail banking services is closely related and, therefore, the advantages of domestic banks, there is need to strengthen the business. Should be actively and production of consumer credit business loans combination of risk control in the entire process involved in an active expansion of business scale, intensive management capacity to improve[16]. From the human life-cycle perspective, credit products started life growth; small and medium commercial banks can follow the educational loans, housing loans, car loans, wedding loans, travel loans, loans for the child's birth, child education, loans, pension loan order, and the customer to retain.#p#分页标题#e#
4.3.3 The business need to strengthen - VIP wealth management business.
It is generally believed that VIP Money residents to a certain level of accumulation of personal wealth after the product. The crucial point is that the VIP Money: First, to provide customers with a high yield finance and investment financing program or programs for the collection of fees: 2 is to reduce its operation costs and increase profitability. This requires banks to have a high capacity and smooth flow of funds of funds the operation of the use of channels, with mixed industry products through diversification to provide "one-stop" service, full-service capabilities. In our country, under the existing pattern of sub-operators, the ICBC, Bank of China and some other overseas institutions, and CITIC, Ever bright, China Merchants Bank, Bank of the background such as financial holding companies of banks could provide high-quality investment and financing options. In addition to small and medium commercial banks in other derivative financial products through innovative financial programs to enhance the supply capacity, but also can adjust their business management and operation of intensive management efforts to improve, through the adjustment of the relations of production to increase production capacity, expanding net interest margin. From the human life-cycle perspective, VIP Money began life, maturity, small and medium commercial banks should make use of the current social security pension and other poor timing, the end-result of the finance and investment program targeted at raising the personal retirement pension, medical care, recreation and leisure protection capabilities, by these to develop new business.
4.3.4 New business Proposed to develop - credit card business
Credit card business can play an important role. Credit card business is not dependent on the existing bank network, customers, human resources, their core competency lies in customer information management, marketing, risk control, standard operating links between the interlocking, convergences is reasonable, with the powerful. Revolving credit interest rate and commodity sales abroad, the credit card business has become a major source of profits. Credit card suitable for all ages can be associated with the life after account opening. As the domestic credit card market is just emerging, and abroad, with the card by VISA, MASTER networks, relying on the domestic use cards CUP: network pattern has basically taken shape, the domestic banks and foreign banks, can advance scientific, even in major cities, specific industries, specific the market and obtain an absolute advantage, and gain considerable profits.
4.4 From a system security perspective, measures to be taken
From the circumstances foreign commercial banks to develop personal wealth management business, it is the trend for telephone banking, online banking, personal financial management software and video phone to replace the traditional bank branch. In recent years, China's commercial banks are accelerating the process of electronic, but for individual customers of network services provided by most of at the trial operation. To enable China's commercial banks to compete with foreign banks, as soon as possible development of China's Internet banking, telephone banking, expansion of service space, truly individual customers to provide efficient, fast, safe service.#p#分页标题#e#
4.4.1Improve the telephone banking services
Telephone banking system (Telephone Banking System hereinafter referred to as TBS) is a new type of modern banking service means on the international scene in the 1990s. Because it uses the world's most advanced computer-based digital voice conversion technology, and make full use of modern public telephone network and the bank's computer network, various types of information the bank can use voice or fax, and telephone graphic form, the bank's computer services to a new height. TBS automatically answer the call to voice-directed customers to use the various functions of the system, but also in the form of telephone voice prompts customers to input a variety of service request. What customers need to do is using the phone's keypad to enter numbers, and he can get satisfactory service. With TBS, regardless of where customers are, they are able to access to bank services timely through a regular voice call.
In recent years, domestic banks have launched a telephone banking service; the use of phone banking has become the latest trend in finance and investment. Despite telephone banking services start late in China, but it is developing in a fairly rapid pace and is gradually being accepted by various customers. Typically, for example, based on original telephone banking services, introduce human services seating, provide the bank offers clients a comprehensive and thoughtful affection services - Customer Service Center. Customer Service Center, also known as telephone banking centers (Call Center), refers to the opening of bank customers by making a telephone call, enjoy a variety of financial services provided by the bank. Telephone Banking Center Services telephone banking services, advanced stage, which focused on manual and automated voice services, allowing customers to enjoy both the fast automated voice services, but also enjoy the warmth of human services.
After bank launch telephone banking center, by phone calls, customers can not only carry out inquiries, transfers, payments, accounts processing, foreign exchange transactions, savings, report the loss and securities transfers and other banking services, you can also switch to manual services in a variety of advice or complaints, very easy for customers. Therefore, all commercial banks should continue to keep the advantages of telephone banking centers and continue to improve various service functions. Such as Citibank of Hong Kong branches Customer Service Center services include 24-hour telephone banking services, online messaging services (telephone message service, on-line message service) and the agreed services (agreed with visiting customer service).
Overall, the phone banking in our country is still in development stage. With the rapid development of network economy and social progress, telephone banking functions will continue to enrich, and satisfy the growing financial needs in clients’ investment.#p#分页标题#e#
4.4.2Enhanced Self-Service Banking
Self-Service Banking is a new network of commercial banking services popular at home and abroad in recent years. The "stupid action" mode that bank of the extensive use of electronic devices to give and enhance of our customers to the financial awareness, cause self-help bank began to be widely used by customers.
With modern scientific and technological means, banking institution of all-weather, multi-functional, safe and reliable regional or self-service that banks provide customers is called as the self-service banking district. At present, the major domestic commercial banks, the district used for self-service banks, such as automatic teller machines, automatic query machines and automatic teller machines and other multi-functional combination of self-service banking terminals known as the self-service banking applications, providing customers with deposits, withdrawals, inquiries, transfer, payment, pay fees on behalf and other services. The establishment of self-service banking application system is not just as a new service means, but to provide a new way of managing money. It can effectively improve the image of commercial banks and competitiveness, reducing operating costs.
Compared with developed countries and areas abroad, China's commercial banks still have a long way to go in the use of self-service banking application systems for personal financial aspects. For example, in the United States, the customer self-service banking in the region through friendly man-machine interface, are able to apply for deposit and withdrawal, pay credit cards, transfer, utility bill payment, check business, can handle remittances, real-time card, apply for small loans, cash checks and financial spreadsheets and other business, they can even buy lottery tickets, stamps and telephone cards, etc.;, voice and image transmission capabilities of self-banking system can also help customers ask the expert for remote consultation; ATM located in the car highway's make it possible to driving customers to be able to get money in cards after opening the window; ATM Located in the supermarket and have automatic closing feature, can independently accomplish the entire process from the shopper to the payment of without cashiers; fingerprint Identification or even the retina identification protect the safety of depositors. China's commercial banks should take lessons from abroad, the advantages of self-service banking, and constantly improve the self-service banking capabilities.
4.4.3 Use advantages of online banking
Internet banking also known as Internet banking, it is a new type of bank which based on modern communication technologies, Internet network technology and computer network, provide adequate personal finance services in the form of electronic data through the Internet and start-up banking business. It consists of only one site the bank, but also have bank which have a fixed physical branches, but on the Internet start-up financial services.#p#分页标题#e#
Internet banking in China is still in the primary stage of development, mainly in their late start, small business types, small trading volume, but it is growing so rapidly that it has become a new field of competition between commercial banks. Because of this approach allows customers to break the constraints of time and not actually to the bank, they can all enjoy an investigation exercise, transfer, payment, credit and other banking services at any point in time, so customers faster and more convenient. In particular, since 2003 has been 3,4 months, due to the impact of SARS, the majority of people appeared less in the bank office, ATM machines and other public places, it had a negative impact on the conduct of personal financial services to a large extent. In this special period, due to the unique advantages of online banking, individual customers do not have to go to the crowded public places such as bank business hall, with out risk of being infected with disease, sit before computer comfortable will be able to enjoy the same services online, thus it gradually becomes a more popular way of bank financial services.
Network technology provides bank a platform for take-off, breaking the traditional financial sector specialization; blur the boundaries between the banking, securities and insurance sectors. In the Internet, banks can not only provide savings, deposits, loans and settlement and other traditional banking business, but also provide investment, insurance, consulting, financial derivatives and other comprehensive and full range of financial services. Internet banking can not only significantly reduces the bank's operating costs, expand services, unlimited in time and space, but also helps banks to broaden the field of financial services, improve the financial service quality, strengthen financial management. China's major commercial banks, should based on existing online banking, broadened scope of services, increase the financial variety, integrate securities, funds, foreign exchange, bonds, insurance, and individual integrated credit and other personal financial business, build the all-powerful banking business platform.
At the same time we must also note that online banking is just a manifestation of traditional banking, it is an extension and sublimation of traditional banks, if the traditional banks are required to develop an online bank, it must combine network technologies with traditional business. From the purely traditional banks online banking development space is very small, but will weaken the share of traditional banking services, "Cement plus mouse" is the traditional banking digitalization and network development in the right direction. There is one problem that should specifically point out; it is the security issues of special carrier of Internet banking services - Internet technology. For personal online banking business operations related to information confidentiality, integrity, effectiveness, and transaction status of the authenticity of the reliability of technical systems and other safety-related factors, China's commercial banks should strengthen the following two points:#p#分页标题#e#
a. Strengthen on-line banking hardware and software systems, ensure the internal system security, and have abilities to withstand the computer viruses and hacker attacks.
b. Enhance the bank's internal management system, such as division of the online banking operator licensing system, internal control system, Internet banking operations processes and normative systems, online banking customers operating instructions and other systems. Only standardize the system, can the internal human risk controls.
In addition to construction and management of these security systems, banks should have taken a number of technical security measures, such as firewall technology, key encryption, digital signatures, digital time-stamping as well as authentication and digital certificate.
5. Conclusion
5.结论
5.结论
Personal Financial Services appeared first in the United States，then spread rapidly in developed countries and areas such as Europe, Japan, Hong Kong and so on.. Now it has been the main business of the large banks in the world, and a popular financial service abroad. With the economic developing gradually, the chance for China’s banks to develop Personal Financial Services has come. Commercial banks have to seize the chance, but the developing of the domestic banks’ Personal Financial Services can’t satisfy the market needs, people call for the development and exploring of personal financial services.
It is necessary and urgent for China’s commercial bank to develop Personal Financial Service. The development of commercial banks’ Personal Financial Services matches the demand of not only market and customers, but also banks’ developing; it is also the demand for competing. It is positive for commercial banks to develop Personal Financial Service. China's Commercial Banks’ Personal Financial Services is in the initial stage, their management system has problems, personal investment system has not been established, banks are lack of qualified financial staff, awareness and the concept of personal finance needs to be strengthened, there are no high-tech Personal Financial Services.
For the problems in development of China's commercial banks’ Personal Financial Services, strategies could be taken: introduce new policy, allow mixed business, The establishment of financial holding company is the realistic choice to achieve Mixed for China's commercial banks in the differences between the premise of regulation, China's commercial banks’ Personal Financial Services Should be developed in the holding company model; while strengthen the construction of other supporting measures: improve laws and regulations, eliminate discrimination against joint-stock banking in supervision, encourage and protect innovation in financial products, establish individual credit system and investment evaluation system, the bank can first establish the relevant personal credit system in the own client system, establish a sound relevant service system, business processes and systems in the attempt to develop business as soon as possible; enhance the training of personnel, build a professional financial management team, establish personal finance professional undergraduate and postgraduate education in the major colleges and universities, introduce CFP Certification System; guide ideas and develop the market, change the concepts of customers and banks, increase investment, establish personal financial support system that bank required, Segment market, create the brand, enhance publicity, marketing actively; make full use of advantage of telephone banking, self-service banking and online banking, improve system security.#p#分页标题#e#
Personal Financial Services in China, after all, is a new thing, laws of its development also requires that we keep to study, explore and master, And it will have some new problems in the development process, we need to address and resolve continuously. Therefore, this paper studies are not entirely perfect, please understand.
References
参考文献
[1] G Victor Hallman Jerry S.Roseenbloom, “personal financial panning” 7th edition, 2006
[2] Jeffrey H. Rattiner, “Getting Started as a Financial Planning” 2005
[3] Peter Tufano, “Financial Innovation and First-mover Advantages”, Journal of Financial Economics 25, 1990
[4] Detemple, Jerome, Garcia, and Rindisbacher, A Monte Carlo Method For Optimal Portfolios, forthcoming in Journal of Finance, 2007
[5] Cynthia Peterson, Banking on wireless, America’s network, 2006
[6] Cara Beardi, CRM shooting holes in the hype, Advertising Age, April 2001
[7] Sydney Ludvigson, Consumption and Credit: A Model of Time varying Liquidity Constraints, The Review of Economy and Statistics, August 1999
[8] Kwok Ho, ChrisRobinson, Personal Financial Planning, The China Financial Publishment, 2008
[9] John. M. Griffith, Lawrence Forglberg, and H. Shelton Weeks, CEO Owership, Corporate Control, and Bank Performance, Journal of Economics and Finance, 2002
[10] Brickley Etal, Outside directors and the adoption of poison pills, Journal of Financial Economics, 1994
[11] Bodie, Zvi, Hanmmond, P.B, and Mitchell, New Approaches to Analyzing and Managing Retirement Risks, Benefits Quarterly, 2006
[12] Martin Parker, Separation of ownership and control, Journal of Law and Economics, 1997
[13] DeLoach, Enterprise-Wide Risk Management, London: Financial Times-Orentice Hall, 2006
[14] Michael Levy, Barton A, Weitz, Retailing Management, 3rd ed.McGraw-Hill Conpany, 1998
[15] Ernst Young “Personal Financial Planning Guide”, 3rd edition, 2005
[16] Lauren. Bielski, Rethinking the branch experience, ABA. Banking Journal, August 1999
Get expert help on all your writing
立即预定