Source: ce.cn    Published: 2016-5-5

After many years` development, the city commercial banks have become an important part of the financial system. Combined with its own advantages, the city commercial bank seeks the differential development, makes full use of new technologies such as the Internet, and also lays emphasis on such less developed fields as small and micro businesses and three rural issues (agriculture, rural areas and farmers), to positively fix the shortcomings against the background of reducing deposit and loan interest spreads, increasing competitive pressure within the industry, and the rising difficulty of risk control.

Dong Ximiao, the guest researcher of the Chongyang Institute for Financial Studies of Renmin University of China, said that the market share of city commercial banks in the banking industry is increasing, but it also needs to eliminate the restricting factors and bottleneck in the development under the influence of economic downturn pressure and deepening of the financial reform.

The pursuit of differential development

The responsible official of China Banking Regulatory Commission (CBRC) suggested that the foundation and source of the development of city commercial banks should be serving small and micro businesses and "three rural" issues, and it should build up competitive brand through the two fields, thus giving better and more financial service to small and micro businesses and rural areas.

"The development orientation of city commercial banks is to form its own characteristic service taking full advantage of the familiarity with the native market and clients," Dong Ximiao said, "tasks it needs to do now are to subdivide small and micro businesses from industry properties and to focus on important industry making full use of geographic advantages to extend its financial service to counties, towns and villages to develop and expand local customers with quality service."

City commercial banks take part in the dislocation competition in practice to promote the differential development. Wang Jun, Chairman of the Zhejiang Tailong Commercial Bank, said that Tailong Commercial Bank is just a small bank, but it has been focusing on offering financial service to small and micro businesses over the years. Zhejiang Tailong Commercial Bank is known to solve such problems as credit, performance, and reliability by means of "Three Ps", that is, Principle, product and pledge, and to solve the problem of information asymmetry by feat of "Three Measurements", that is, water meter, electricity meter, and customs returns, which effectively verify and supplement enterprises` financial statement; at the same time, it also overcomes the difficulty in mortgage guarantee by credit and loan on guarantee. Tailong Commercial Bank takes the initiative in carrying out "Sunshine Interest Rate" and in reducing or remitting over 70 service charges to save financial costs for small and micro businesses.

Bank of Beijing explores the business mode of small and micro businesses "Credit Factory" and implements "Batch Marketing, Standardized Loan Approval, Differential Post-loan, and Characteristic Motivation"; at the same time, the bank also actively studies the specialized service channel appropriate for the management features of small and micro businesses and builds strategic cooperation with the departments concerned, positively supporting the development of small and micro businesses in the related fields.

JC Bank adheres to customization when giving service to "three rural issues" and small and micro businesses, and launches such personalized products as agricultural machinery loan and greenhouse loan around peasant households purchasing agricultural machinery and renting greenhouses. Last year, JC Bank puts forward the deployment of "Five Intos", that is, into rural areas, into communities, into schools, into hospitals and into business circles, further deepening the financial service.

Joining hands with the Internet

"Establishing customer-centered digital banking service with Internet technology can not only make up for its limiting factors of outlet quantity and distribution to some extent, but can also make the traditional bank transform rapidly and improve customer service satisfaction and cross-selling ability in the process when the city commercial banks offers online to offline financial service," said Dong Ximiao.

Lin De`an, vice president of Bank of Yingkou recommended that the bank sets up the Internet financial system for small and micro businesses by combining the Internet finance and small-and-micro finance, and also is committed to meeting the needs of small business circle of communities, innovative development of small agriculture, and low-cost credit of small enterprises.

Baoshang Bank focuses on building the commercial bank on the Internet to offer service to small and micro businesses in the Internet commercial activities. "Last August, Baoshang Bank digital banking business platform �� Aerobic Finance, was launched, and separate digital banking business department was also founded, which is equipped with independent financial and credit resource and risk examination and approval strategy," said Liu Xin, president assistant of Baoshang Bank.

Development bottleneck to be eliminated.

"One of the short slabs restricting the development of city commercial banks is the construction of outlet channels. City commercial banks should increase the satisfaction of customer experience by means of expanding community sub-branch and small and micro branches, and should also combine the physical outlets with digital banks to realize the online-and-offline integration to increase the customer retention," said Dong Ximiao.

City commercial banks are continuously promoting the construction of outlet channels. It should give priority to setting up physical outlets specializing in local small-micro businesses, parks, communities and rural areas to innovate the service mode and to build the competitive characteristic sub-branch. Wang Jun said that 100 percent of the resource of Tailong Commercial Bank will further deepen to lay emphasis on the service channel distribution in community, market, rural-urban continuum and villages and towns to assist the transformation and upgrading of small and micro businesses, to improve the quality and economic benefit and to meet the needs of residents and farmers.

Yang Rui said that city commercial banks should focus on important industries and adjust the customer structure around the features of local economy and the needs of small and micro businesses. It should also implement the differential management pattern boasted of regional characteristic to guarantee the stability and improvement of profitability and to further develop the innovation ability of financial product.

"In addition, the city commercial banks needs improving its pricing power," Dong Ximiao said, "if it wants to gain such competitive edges as pricing power, the bank should centralize predominance to develop its core business on the basis of its own strategic planning and development orientation, and should also rely on asset-end clients and projects to match funds by means of bond financing tool, structured financing tool and financial management to strengthen assets management ability. Furthermore, the bank should strive to develop intermediate business to reduce operating costs."

 

Dong Ximiao, the visiting fellow of the Chongyang Institute for Financial Studies of Renmin University of China, was quoted in this article.