The Innovated Strategy Research For Intermediary Business Development Of Bank Of Communications

Since the 1990s,the competition of finance business had dramaticly increased with the further deepening of global economic integration and financial internationalization trends. On December 1st, 2006, after five years transision and protection, the Chinese banking industry began to be fully opened. Market competition intensified and the stimulate from public demand, forced the bank's changing from the pursuit amount of asset to actual profit and also prompted commercial banks to speed up the expansion of intermediary business, which became a new profit growth point of commercial banks.Bank of Communications, one of the five major commercial banks in China, also take the development and innovation of intermediary business as the primary task to achieve. In this article, through the compare of intermediary business development from domestic commercial banks to foreign ones, with reference of major factors which restrict the development of domestic commercial banks, in the propose to innovation and development of domestic commercial banks in the intermediary businesses, by analyzing the BOCOM's development and innovation in intermediary business at present, summed up 5 "resonance" theory to speed up the development and innovation of intermediary business in BOCOM.There are five sections in the article:Section 1, Introduction. States the definition of commercial bank's intermediary business, which does not constitute a commercial bank assets and liabilities, and could achieve a non-interest margin profit. The basic features is a commercial bank asa middleman providing the service of collecting, paying, agenting, clearing, consulting and other commission business for customer, charging during various financial services. With the assets, liabilities, business together constitute a modern commercial banking operations of the three pillars. Then, classified intermediay business from functions and forms narrowly and broadly. At last, concluded the significance of developing intermediary business: It is the objective needs of China's commercial banks and also the inevitable choice.In section 2, author addressed the developments and innovations of intermediary business. It becoming the key point business of modern commercial banks gradually. China's commercial banks intermediary business developments has three features: Namely, the development of intermediary business has achieving a major strategic transformation to be implemented; intermediary business revenue grew faster, the rapid development momentum; intermediate business products is increasing. Although it has been ten years since intermediay business started in China's commercial bank, there is lag compared with foreign commercial banks.In section 3, describes the status of BOCOM's intermediary business developments and innovations and summarizes characteristics. Recalling the great efforts been made and fruitful results achieved by BOCOM in resent years. 2006 -2,008 nearly three years of intermediary business showed steady growth trend, the increase in the domestic same industry leading position. And as the incraasing of innovative intermediary business continues, BOCOM's intermediary business has been gradually formed long development, and various departments. Problems also been found during that development: 1. The main point of profit is still concentrated in the deposit and loan spreads, but with the gradual deposit and loan spreads narrowing and the fierce competition in the market , the contribution of its profits will be gradually reduced, can not meet the Bank of the long-term sustainable development. 2. Intermediary business less variety, type single. 3. For the development of intermediary business risk control capability is weak, limiting innovation and development of intermediary business.In section 4,author discusses the constraints to business development among the Bank of Communications .External factors: 1. Policy constraints. Were as follows: First, the innovation and development of intermediary business is lack of policy support. Second, intermediate business pricing policies is imperfect, without the formation of the market pricing mechanism. 2. Constrained economic environment. At present, China is still in the lower socio-economic level, low level of internationalization of the economy, inadequate development of network economy, a variety of new financial instruments do not survive the soil, lack of market demand, combined with banking information is not in place, enterprises or individuals Banking intermediary business services lack adequate knowledge and understanding, so that the intermediary business market oversupply, difficult to innovate. 3. Customer constraints. Existing bank customers of traditional production and management and financial ideas hinder its recognition and acceptance of intermediary business, most bank customers are accustomed to "free meal" and low-quality services, it is difficult to accept "paid services" the distinction between services. Internal factors: 1. Constraints of BOCOM's managing philosophy. BOCOM conceptual errors in operation, there is no business to conduct accurate positioning. Generally only attach importance to deposit and loan business, but not from a business strategy to intermediate business as a pillar of business for development. 2. Management system constraints: First, BOCOM, "first class corporate" management system constrains the middle of business innovation. 3. Science and technology and human resources constraints: First, intermediary business services, science and technology content is not high. Second, high-quality management, marketing, acute shortage of staff.In Section 5 by comparing the Internal and external constraints factors of the BOCOM intermediary of business development, the article proposed five sugesstion which is characteristic of the innovative development of the intermediary business for the Bank of Communications. Intermediary business innovation must be connected with the building management system, operation transformation, customer needs, integrated marketing, risk management. Establied the specialized agencies, train specialized personnel, establishment of special mechanisms; implementation of the loan conversion strategy, introduction of a deposit differentiation strategy, implementation of the business of mixing business strategy; to address the needs of regional characteristics, highlight the key requirements, develop the potential demand; explicitly integrated marketing requirements, promoting " 1 + X "integrated marketing model, and strengthen an integrated marketing duties; coordinate the relationship between the charges and interest income to guard against price risks, and coordinate the relationship between the charges and stable source of clients to prevent financial risks, and coordinate the relationship between the development and management to prevent operational risk.Section 6 is the article's conclusions and prospects of BOCOM's intermediary business development. Bank of Communications must from a strategic business speedup the development of intermediary business from a strategic view. In allusion to a bottleneck restricting the development of intermediary business issues, adopt foreign experience, constantly innovate in order to effectively improve banking revenue structure, and continuously improve the profit, strengthen the overall competitiveness. In the emphasis on financial innovation , attention also need to be paied to risk prevention and control, so that innovation of intermediary business is more conducive to the long-term stability of the Bank of Communications sustained and healthy development.