| 80-20 rule has been demonstrated correctly in every social aspect. As in banking sectors in recent years, banks allocated most resources such as financial products and services to those customers who brought majority of banking profits to the banks, but account for only a small part of customer base. Since its IPO in Hong Kong, Bank of Communications (hereinafter called Bankcomm) inducted a strategic partner---HSBC, put forward strategic transformation to retail-oriented business and planned to create a first-class retail bank within three years. First step of strategic transformation is to set up specifical sites called"OTO Fortune"providing services for high-end customers. Abbreviation of"OTO Fortune"is OTO sites. They are categorized into A,B, and C levels. Level A site i.e. OTO service center is set to provide services specifically to OTO clients. These service centers include marketing and consulting area, high-counter and low-counter area, OTO Fortune service area, and automatic service area. Level C sites are traditional bank offices which include a green passage for OTO clients. Level B sites are combination of characteristics of A and C sites, that is, adding marketing and consulting area, low-counter area, OTO Fortune service area to level C sites. The purpose of setting OTO sites is to strengthen resources allocation and client structure, raise the return on equity, and to provide one-to-one fortune management services to VIP customers.As a matter of fact, personal wealth management had grown vigorously for more than half a century in foreign commercial banks. Since the 80s of last century, the management theory of commercial banks turned from asset-liability management to client management. Banks began to apply derivative products in offering personalized services to different individual customer according to their various risk undertaking abilities and risk aversion. In Hong Kong SAR, providing fortune management service to customers has seen a long history. The initial and simple fortune management services include only single products such as savings account, bonds and fund agency, and insurance purchase, etc.. Now it has developed into new approaches, i.e. combination of single financial products : combination of deposits, combination of deposit and loan, combination of deposit and stocks, funds, and insurance. Many famous banks launched their new various wealth management services such as"Excellent Wealth Management"for HSBC,"Citibanking"and"Citigold"for Citibank,"Priority Wealth""Wise Wealth""Easy and Fast"for Standard Chartered bank, etc..It is concluded, if analyzing the semi-personalized and private services provided by Bankcomm to their high-end customers by SWOT in order to establish the strength, weakness, opportunity, and threat of OTO brand, that Bankcomm must segment the market share, if not, the market share now occupied by Bankcomm sooner or later will be segmented by other banks. After conducting a thorough investigation and survey of our VIP customers, we found that the need for setting up sites with extreme privacy and better services became urgent. So setting up OTO sites can satisfy this need and establish our brand products.Banks in Changchun currently have locked in and retained some stable VIP customers for their own. As a result, contribution to bank profits by the VIP customers has been constantly shown up. Some banks'product brand have been well known by the public, such as"Golden Wealth Account"of ICBC,"Sunshine Fortune"of Everbright Bank of China, most famous of which is the"Golden Sunflower Wealth Management"of China Merchant Bank under which VIP customers can enjoy such favorable banking services as counter service, VIP room, wealth management center, net banking, and phone banking services. As for"OTO Fortune"of Bankcomm, it can not only completely cover all the services offered by"Golden Sunflower Wealth Management"of China Merchant Bank, but also provides one-to-one fortune planner service and VIP services in domestic airports.National Bureau of Statistics conducted a survey about the property situation of 4,000 families in 8 provinces in 2005. Families with more than 300,000 financial assets accounted for 16.7 per cent, 150,000 to 300,000 accounted for 48.5 per cent, and families with 150,000 below accounted for 34.8 per cent. These figures showed that the percentage of families requiring banks providing fortune management services is huge. Meanwhile, the balance of residents'savings in banks reached 78.3 billion RMB.Banking employees in Bank of Communications, Chang Chun Branch analyzed several indexes of its VIP customers including the structure of ages, financial products possessed, their loyalty and extent of contribution. It is concluded that offering one-to-one wealth management service to VIP customers can help raise the rate of cross sales, establish the brand image of Bankcomm, allocate efficiently financial resources. It is regarded the most efficient strategy of marketing offering the best personnel and banking facilities to the best customers.Cost and efficiency analysis was also conducted before implementing this new strategy. Cost analysis revealed that if the cost of renovation, cost of facilities and machines, and other overheads be amortized within one year, the overall cost would be RMB0.5 million. Analysis of profits has been done in terms of the amount of OTO customers, total assets they owned, and the previous speed of assets growth to predict the projected profits in two years.The RMB balance of individuals'deposits as of the end of 2006 of Chang Chun branch was 18 billion. Assuming that the annual growth rate of individuals'deposits is 10 per cent, the predicted RMB balance of individuals'deposits will be 21.78billion. By the end of 2006, the saving deposits of OTO customers accounted for 24.79 per cent of overall balance. Assuming the percentage rate of deposits increase of OTO customers be 5 %, and the balance of deposits of OTO customers would be 5.952 billion till the end of 2008---an increase of balance of 1.489 billion yuan. Based on the assumption of 0.5 million yuan profits generated by each 100 million balance of deposits, estimated revenue of 7.445 million yuan will be brought into the bank by its OTO customers which would certainly cover the expenses.The above analysis shows that the external environment and internal need for business development make it completely feasible to set up OTO sites in Bank of Communications, Chang Chun branch. |
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