On The Chengdu Market, Foreign Retail Banking Competition Strategy

With China removes all geographic and business restrictions on overseas banks to meet commitments made to join the World Trade Organization seven years ago. Foreign banks businesses in China are supposed to increase largely during this process. Most foreign banks mentioned in their report predict that their business in China will grow by at least 20% this year.Foreign banks that have launched business in China are optimistic about their business prospect in China and determined to expand their bank business in main land. It is expected that by 2010, the total assets of these banks will double the current figure to reach 100 billion US dollars and the net profit of these banks will quadruple.Will foreign banks post a significant threat to Chinese ones in the short term?The fact is not. Domestic banks still have far larger networks, according to figures from end of 2006. The 70,000 branches for China's four biggest state-owned lenders dwarf the 254 for overseas banks. And with competition intensifies, most foreign banks now face problems in their business development in China. Especially they continue to lag behind Chinese banks in branch coverage and client base for the immediate future.Foreign banks are to set up new business strategy to overcome the challenges, in order to support the company's business development in China.They are1. Corporate Brand. World's famous brand means a promises to the customer value for money service, a variety of channels through which the customer can choose to carry out banking activities. And this is also be used to close the cultural issues.2. Customer Service. "Different services for different clients" is one of the ideas of foreign banks, a special system is adopted of arranging managers for specific clients.3. Product Competition. Foreign banks are keen to make markets in new products because of their superior knowledge, gained from overseas, of the technical aspects.4. Target Marketing. Millions of dollars spent by foreign banks to break into the Chinese market, targeting its potential customer and increase its market share.5. There is truly a win-win outcome here if all segments of the banking community recognize the benefit of improving the competitiveness of the PRC banking industry as a whole, so that everybody can have a share of the bigger pie that will be created.