CCB takes innovative path to smart bank

Ten years after its initial public offering in Hong Kong, China Construction Bank Corp, the country's second-largest lender by assets, is accelerating its transformation into an innovative, smart bank by offering multifunctional, comprehensive banking services.

Today, in less than two minutes, a customer can open an account with CCB through its smart teller machines, by having their identification verified through a combination of facial recognition, ID photo check and fingerprint authentication technologies.

The lender started operating the STMs in Shenzhen, Guangdong province, on a trial basis in July and plans to launch the machines across the city by the end of this year. Clients can use the STMs for multiple services involving no cash, such as money transfer and purchase of wealth management products.

Wang Hongzhang, chairman of the bank, said: "Chinese banks have arrived at a critical point, a decade after the ownership reform started. Owing to the economic slowdown, banks are facing tremendous pressure and need to find solutions to overcome them and achieve sustainable growth."

Though the Chinese economy is shifting from high speed to medium-to-high speed growth, commercial banks are facing challenges like interest rate liberalization, diversification of financing channels for enterprises, and intensified competition from non-banking financial institutions.

Top leaders of CCB have decided to transform the State-owned commercial lender into a smart bank. To realize the goal, the bank invested more than 7 billion yuan ($1.1 billion) to set up a new data center in Beijing, in addition to the two data centers it already had in the country.

It is also experimenting with robot clerks on a trial basis in Suzhou, Jiangsu province. The robots can interact with clients by answering basic questions about the bank, its products and services, with assistance of a human clerk on more complicated questions.

Yang Wensheng, executive vice-president of CCB, said: "We'll use big data analytics and Internet technologies to rebuild our bank and create a financial ecosystem that integrates the flow of capital, information, products and logistics."

The bank divided its retail clients into 100 categories based on their personal information, including age, income and shopping interest. By analyzing their behavioral traits, it will provide standardized financial solutions in different scenarios and comprehensive individualized financial solutions.

Yang said: "With the application of big data, we'll help companies identify problems in business development, offer industry consulting services, make suggestions on economic policies and provide better services to a third party."

CCB made great efforts to develop electronic banking in recent years. Its Internet banking clients have now exceeded 200 million while mobile banking clients have reached 170 million.

At present, the bank has sold nearly 80 percent of its wealth management products and more than 70 percent of its funds online. About 95 percent of money transfers, fee payments and personal wealth management at the bank are done via electronic channels and self-service equipment.

Experts hail deposit rate cap removal

Chinese banks are divided on deposit rates after the People's Bank of China, the central bank, removed the ceiling on deposit rates for commercial lenders and rural cooperative financial institutions on Saturday.

Large State-owned commercial banks now offer a 1.75 percent one-year deposit rate for individual clients, up 25 basis points from the central bank's one-year benchmark deposit rate, while most of the listed joint equity commercial lenders increased their one-year deposit rates to 2 percent.

City commercial banks are even more aggressive in competing for personal savings. Harbin Bank Co Ltd, the first city commercial lender in Northeast China listed in Hong Kong, increased its one-year deposit rate by 100 basis points to 2.5 percent.

The current-account deposit rate for individual clients of Harbin Bank also rose 3 basis points from the benchmark to 0.38 percent. The majority of the 21 listed banks in China, however, cut their current-account deposit rates by 5 basis points to 0.3 percent.

Share prices of most of the 16 banks which are listed in the Shanghai and Shenzhen stock exchanges climbed on Monday. Shanghai Pudong Development Bank Co Ltd, a mid-sized commercial lender, rose by 2.39 percent to close at 16.28 yuan ($2.56), while China Merchants Bank Co Ltd, another mid-sized lender, had the biggest drop of 0.66 percent among the 16 banks, closing at 18.07 yuan.