Research On The Personal Financial Service Innovation Of Chinese Commercial Banks

With increasingly fierce competition today,Chinese commercial banks are facing many challenges such as limited number of corporate clients with outstanding financial and credit condition,shrinking loan profit margins,increasing investment capital regulations.Many of them have been shifting their core business towards retail sector.Personal financial service (PFS) has become the most important part of retail business for many commercial banks. Under the current social system,there are many obstacles and challenges for the development and growth of personal financial services(PFS) with n Chinese commercial banks due to sub-business operation and administration in Chinese inancial industry,immature financial market,insufficient system regulations,and increasing competition from emerging foreign banks after protection period of joining the Work Trade Organization(WTO).In the meantime PFS does provide Chinese commercial banks with great opportunities and bright future.Chinese commercial banks have to be innovative in order to not only survive,but also strengthen and grow themselves from fierce market competition.As a graduate student with years of first-hand experience at commercial bank,the author has his unique apprehension on importance and urgency of PFS innovation of Chinese commercial bank.With the help and instruction from his graduate instructor,the author starts this research project focusing on PFS innovation of Chinese commercial bank.Multiple appro(?)ches such as reviewing and studying books/publications,interviewing economic experts,investigating and researching the actual operating commercial banks have been utilized to collect the accurate data and comprehensive information.The in-depth analysis and cross reference comparison have been conducted among the pairs including domestic versus foreign,theory versus practice,historic versus current,macro versus micro,system versus technology,f(?)cts versus vision.Started with introducing some of the foreign and do nestic research study results on PFS, the author emphasizes the purpose and significance of this study by analyzing the challenges Chinese commercial banks are facing particularly from emerging foreign banks under current WTO treaty as well as the opportunities they have.The concepts and contents of commercial bank PFS are introduced and the two major fundamental theories of PFS-Financial Innovation Theory and Portfolio Selection The(?)ry have been laid out in detail.By reviewing the history of foreign commercial banks PFS as well as their current status and developing trend,the author then points out the necessity and urgency of PFS innovation for Chinese domestic commercial banks through analyzing domestic commercial banks PFS history and current status,dissecting all major difficu(?)ties and challenges that domestic commercial banks are facing as well as the causes behind. To address the ideas and ways for PFS innovation,the author highlights the key point for Chinese commercial bank PFS innovation is to transform the service from traditional static financial service which only provides single financial product or service,to dynamic financial service which provides services such as personal financial planning(PFP).PFP should then promote the business of single financial product or service within commercial banks.To achieve this transformation,the author has provided solutions and suggestions for commercial banks to be innovative in many areas including financial products,financial services,sales channel,backend supporting system,internal management,business operating model,and financial market promotion.The ultimate goal for all these innovative procedures is to lead commercial banks to transform from 'bank-oriented' to 'consumer-oriented' so that commercial banks would be able to provide various levels and choices of financial services based upon various customer demands.PFS within commercial banks then transform from simple,static,uniformed and less attractive form to layered,individualized,specialized and more attractive form to assure domestic commercial banks stay competitive on the financial market.To emphasize PFP As key portion of PFS within commercial banks,Sample analysis and technical discussion for factors of portfolio selection and quantitative analysis within PFP have been provided by applying the Portfolio Selection Theory to lay some ground work for the innovation of quantitative analysis application in PFP.Conclusion:The increasing competitive domestic financial market presents both challenges and opportunities to Chinese commercial banks.Chinese commercial banks must transform by adopting PFP as core business of PFS.Various innovative procedures have to be performed among financial products,services as well as the entire operation management system in order to develop an innovative PFS to ensure Chinese commercial banks stay competitive,successful in increasingly competitive financial market.