Development Research in China's Banking Personal Financial Services-中國銀行個人金融服務的發展研究

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#分頁標題#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#分頁標題#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.

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#分頁標題#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#分頁標題#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#分頁標題#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#分頁標題#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.