Analysis And Countermeasures Research On Cash Management Of Construction Bank Of China

With the development of modern financial markets and daily intensifying inner-bank competition, the foreign commercial banks in China will inevitably have a great impact on the existence and development of our country's commercial banks. As a newly developed business, cash management is bound to be a focus of competition between the foreign and domestic banks. Therefore, analysis of the present cash management and exploration and research on the ways of developing cash management contribute greatly to the business development, profit keep and increase and overall competition enhancement of the China Construction Bank. In this article, the necessity and feasibility of developing cash management in domestic banks (hereafter taken the China Construction Bank as an example) is well illustrated by the contrastive analysis of the function and development trend of the cash management between foreign banks and domestic banks. The imperfection related to cash management of the China Construction Bank will be found through the analysis of successful cases concerning cash management. Combining the advantages of numerous branches, high fund clearing speed, low charges and getting the support from PBC on financial innovation provided by PBC, the article put forward reasonable advices and measures concerning service concept, products arrangement, improvement of electronic banking system and structure construction will be pointed out. The contend of the article mainly include the followings: 1.The contrastive analysis of the cash management between foreign banks and domestic banks Over 30 years'development, cash management first produced in European and America countries has become a comparatively mature financial product. It is only held by several banks in the word, such as, CITI Group, HSBC, Deutsche Bank, JPMorgan, Standard Chartered and so on. Based on the direct connection of electronic banking system and electronic notes paying system of e-commerce with ERP system and customer host, the sole function of paying, clearing, lending and credit extension has been converted to provide specialized fund management services for enterprises. Through the rearrangement of receiving, paying, account management, information consultation, investment, financial leasing and etc, the China Construction Bank provides the most prompt and economic money management plan for its customers and positively works as a "financial housekeeper". At present, the cash management of advanced international banks is in a transition to the financial management which is in higher advanced and has more additional value. In the future, financial risk management will become an important part of services provided for enterprises, which is also a potential and appealing market for banks. Now, many branches of domestic commercial banks do not realize that business of providing the designed cash management plan for enterprises can bring other cash management businesses such as financial leasing, consultation and so on, which is profitable. What is more, they don't even realize that cash management is an important way of competing with other domestic commercial banks in attracting important qualified customers from now to the future. Therefore, the cash management of domestic banks develops slowly. The present technology of domestic banks is backward; cash management products which are individualized and high leveled are deficient; the cash management is limited to management of money receiving and paying and account balance; The services named "cash management"is still unavailable. In the future, the developing trend of cash management in domestic banks will be mostly like this: to strengthen further the present function of transaction and liquidity management while enlarge the risk and demand management of enterprises'short-term working capital. 2.Necessity and feasibility analysis of developing cash management in the China Construction Bank. Firstly, CCB faces both challenges and chances in the present marketing environment. The article discuss the necessity of developing cash management in CCB from the following aspects, namely, enhancement of market competition power, consolidation of business relationship with customers, realization of win-win strategy between banks and enterprises and effective control of enterprises'cash flow, capital cost reduction, and risk control of interest and foreign exchanges. Secondly, in recent years each commercial bank has been continuously innovating some advanced cash management products such as on-line banking, on-line settlement, account management of enterprise group to meet the individualized needs of its customers due to continuous improvement of financial environment and loosen supervision of financial authorities. The inner-city remittance and clearing system provided by the four large state-owned commercial banks make it that the account money or cash of enterprises can be transferred between cities within 24 hours, and instant transfer can be made within 2 hours possible, which accelerates the money rotation of enterprises.Thirdly, according to the developing market conditions, the CCB headquarter has taken cash management as the emphasis of its business development and marketing and makes it server as main services to enlarge the market and serve the customers. Some branches also take a positive pose in the improvement of product research and services in accord with its customer conditions. In order to grasp the market chances and continuously expand the CCB'market share, each branches, second-level branches and operating branches should response positively and attach great importance to cash management. The win of the bid for GE cash management project sponsored by CCB, The Shanghai branch's win of the bid for the cash management project of Shanghai Bell-Alcatel com., Ltd are symbols of its great progress in cash management. 3.Exploration on cash management field by CCB The article introduces CCB's innovation and exploration on cash management field by taking the automobile finance service network jointly established by CCB and FAW group as a example. Base on the above, the article gives a brief analysis of cash management services network established by Jilin Electronic Power com., Ltd and CCB. 4.Contermeasures and advices of developing the cash management of CBB Firstly, we must improve the understanding of cash management, change the concept of it, carry out the service concept of "big depositing bank", improve management concentration and standardize the services to develop the cash management business; at the same time carry out different services concept in the marketing strategy, improve the checking mechanism, provide regulation guarantee. Secondly, we must further improve the services products and marketing, enhance and enlarge system functions to realize successful management of money concentration and money pool and improve competition power. Thirdly, the group customer model of financial management should be realized, which include unified receiving and paying model, separated receiving and paying model, settlement center model, financial company model. The fourth, the foundation construction of informationization should be accelerated so as to offer technologic support for cash management services; the constant innovation of product and technology should be maintained and ways of cash management services should be enriched. A system platform of cash management which is unified in CBB should be established and information services should be added. The fifth, we should pay attention to talents training and improve the quality of the marketing team of CBB. Based on the present system of customer manager, the product manager system should be established to regulate the process of product management.