Research On The Development Of Private Financial Planning Business Of Commercial Banks In China

As the expansion of globalization, internet and financial liberalization, the private financial planning business has been recognized as a potential field in the industry of international banking. China is experiencing accelerative economic transformation, fast development of capital market and increase in the people' s private wealth. Meanwhile the private financial planning business bring great profit for the banks. In view of China' s present situation of economy, finance and banking operation, it is necessary for the commercial banks in China that they treat the business of personal financial planning as their new growth point of benefit and key strategy of development. This is also where the significance of this article lies.At first, the paper theoretically investigates the private financial planning business in the commercial banks and introduces its meaning and categories. Four features are concluded from this work. They are individuation, diversification , specialization, and information. The main theoretical basis of the private financial planning business consists of financial innovation theory, life cycle theory, market segmentation & positioning theory and marketing theories. The financial innovation is the key weapon for commercial bank to succeed in the private financial planning market, while life cycle theory is the basis for developing personal financial planning products. The market segmentation and positioning theory provides the differentiation of personal financial planning products and services while the commercial banks build integrative marketing system with marketing theories. The four bases work together to help provide the personal financial planning products and services which perfectly meet the needs of the customers.In the developed countries, the private financial planning services are relatively mature while it is in an initial stage in China. However, both Micro and Macro background in China' s market indicate a wonderful prospect of the private financial planning services in China. This is one of the important reasons for the rapid development of the private financial planning business in recent years. Then the paper analyzes the status quo of the private financial planning business of commercial banks in China. The market status is analyzed from market supply, market scale, competition status and legislation & supervision system. On the other hand, the product status is illustrated by the analysis of product brands, product scale, product categories and product innovation, furthermore, the features of the products' market performance are concluded thereafter. From the status analysis, it is resulted that the private financial planning business in China' s commercial banks is highly developed within recent years. But its absolute scale is small with a low percentage in the whole banking business. The main inner reason for this is the lack of innovation. The banks could not provide the services according to the customer' s needs without product innovation which is closely related to imperfect service system, weak risk control, lack of specialists and bad market strategy etc. Concrete analysis of these factors is conducted in this article. From the outer side, the obstacles for the development of the private financial planning business include separate banking system, imperfect personal credit system, the policy of interest rate control and imperfect legislation & supervision system.At last, on the basis of those analyses above, the author proposes some strategic suggestions for China' s commercial banks to improve their private financial planning business from two aspects. One is to develop internal instruments while the other is to perfect market environment. Referring to the inner side, a bank should treat the private financial planning products and services innovation as its key competence. This can be achieved by constructing a brand-new service system, providing training for specialists, building up effective customer management system, strengthening risk control, introducing modern marketing strategy and constructing brand effect. As to the outer environment construction, following steps should be conducted: gradually relieve financial restriction, enhance personal credit system, perfect legislation and supervision system.