Smart bank transition continues

Visitors interact with a China Construction Bank robot at a finance industry exhibition in Beijing on Sept 2, 2016. [Photo/China Daily]

Second-biggest lender by assets deepens existing moves for diversified services, says chairman

The chairman of China Construction Bank Corp, the country's second-biggest commercial lender by assets, said it was deepening its transition toward innovative smart banking with comprehensive businesses and diversified services.

Chairman Wang Hongzhang said that facing the pressure of multiple factors such as economic restructuring, interest rate liberalization and the impact of internet finance, it was inevitable for his bank to accelerate the transition and to deepen financial reforms.

"CCB is determined to make transitions toward comprehensive operation, multifunctional services, intensive development, innovative banking and smart banking," he said.

Steven Xu, partner of EY Financial Services in Greater China, said earlier this year that commercial banks must transform their business models, technology and institutional systems to handle the challenges of slower profit growth and rising bad loans amid an economic downturn.

Starting in 2012, CCB devoted major efforts toward establishing a web-based comprehensive financial service platform. Today, one out of every six Chinese people nationwide uses its internet banking service, and the number of its mobile banking clients has reached more than 200 million, the bank said.

Wang Hongzhang, chairman of China Construction Bank. [Photo provided to China Daily]

To date, the bank has built 12 smart banks and a number of flagship outlets, offering services through nearly 20,000 simplified smart teller machines and more than 1,000 standardized STMs. The bank said its smart robot customer service launched on the web and mobile phone devices now serve 2.3 million people per day on average, with the accuracy of replies exceeding 90 percent.

According to CCB, by adopting big data analytics in the areas of precision marketing, product innovation, risk control and operations management, it has achieved tangible results in early warnings of risk for small companies and data mining of clients who do not have bank loans.

On the innovative banking front, CCB said it has made more than 3,600 product innovations from 2013 to 2015, 3.5 times the number between 2010 and 2012.

"We keep improving our innovation system and abilities, especially putting a greater emphasis on business model innovations, to realize a transition from size-driven to innovation-driven growth," Wang said.

"When technologies and strategies have become the strengths of a commercial bank, size is no longer a problem."

In addition, the transition toward comprehensive operation and multifunctional services has diversified CCB's sources of income. The latest interim results of the bank showed that its net fee and commission income rose 5.6 percent year-on-year during the first six months of 2016 and other types of non-interest income surged 140 percent.

Other large State-owned commercial lenders, such as Industrial and Commercial Bank of China Ltd, have also further advanced their business transformation－to release new dynamics and operational vitality.

In the first half of this year, ICBC posted a 6 percent year-on-year increase of fees and commissions. By the end of June, the volume of credit cards issued was 118 million, by which the bank became the biggest credit card issuer worldwide.