Innovation And Development Of Fee-based Business To The Commercial Banks In Our Country

The paper started from the analysis of financial innovation theory, it discussed the banking business under supervision and emphasized the innovation and development of fee-based business, which was another important business of commercial banks besides traditional interest-based business.The first chapter introduced the financial innovation theory, which means creating and bringing in new products throughout reorganizing the existed elements and creative transformations. The theory could be mainly divided into financial business innovation and financial system innovation. Financial innovation was the power of the development of the international financial industry in the past few decades. It was also a key method, which was helpful to the future existence and development of China's banking industry. What's more it's the impetus for realizing the transformation of profit-earning pattern, rebuilding operational and managing system, accelerating the refresh of operational idea and the culture of banking enterprises. The paper introduced the features and the direction of development for international and national financial market as well.The second chapter described the actuality of the fee-based business development in commercial banks. Firstly, it took ICBC and BOC's debut in the stock exchange market in the mainland as an example, then analyzed the disadvantage for the development of fee-based business, meanwhile, it pointed out the background and opportunity for the development of non-interest business.The third chapter was an important part of the paper, which talked about the structure and key products selection of the fee-based business. The author divided the business into the following sectors in the sense of practice: corporate business, retail business and others. Firstly it introduced the products in general sense, then described some new products in detail, which mainly includes financial advisory, syndicated loan, structural forward exchange business, personal wealth management and short term bond issuing for enterprises. For each product the author explained how they were designed, construed its advantages and disadvantages, provided tips for avoiding possible operational risks and analyzed the benefit of both the bank and the customers. Specific examples were used to illustrate all the above.Besides, the products the paper chosen were mainly focused on derived fee-based products from loan business, international financial business and the products brought by the innovation of the domestic financial market. These fee-based products highly reflected the impetus of financial innovation, which includes breaking through the controls, sharing the risks and developing science and technology.The forth chapter were written from the prospective of strengthening and improving management skills. It gave some suggestions and countermeasure on how to impulse the development of the business to the bank and the state administration.Finally, the paper concluded the six features came along with the financial innovation and pointed out the positive effect of these products. The financial structure was reformed; the newly designed products provided a low-cost financing channel; the core competitiveness of commercial banks was improved: the coming of the new products would increase the CAR of commercial banks; the ability of avoiding risk was improved either; the process of rate change in China was accelerated; the rate-forming mechanism reform was carried out successfully; the development of the derived products from rate and exchange rate was promoted and the money police was transmitted perfectly.Based on all the above the author considered that non-interest business would bring a bright future to the commercial banks in our country, it would contribute greatly to the banks as well as the traditional asset business (loan-approval) and retail business (CMB planed to be a retailing bank). The commercial banks must try their best to develop the newly designed fee-based business.