China's Commercial Banks To Outsource Research

Outsourcing of banks has begun since 70s in 20th century, but it began kind of late in China, which leads to lack of experience and benefit. This paper is based on theory and involved example, including five chapters.Firstly, why outsourcing in commercial bank came up is introduced. Outsourcing in commercial bank is developing rapidly but not mature, which is opposite to foreign countries. It is considered a measure as reducing in cost, developing competition, enhancing business and so on. In this part, the background of outsourcing in commercial bank is introduced.Secondly, theory on outsourcing in commercial bank is discussed, which based on both classic and modern economics. Classic economics about outsourcing includes division of labor, scale effect, and transaction cost, which is the reason commercial banks apply outsourcing; Modern economics involves value chains, competition, bank reconstruction. The latter one is better for analyzing outsourcing in modern bank. This part is the theoretical basis.Then how our country is developing is discussed. The reasons for outsourcing in commercial bank include reducing cost, enhancing product and service, acquisition of outside resources and competition. However, outsourcing in commercial bank is not very strong yet in China. But outsourcing in commercial bank has developed a lot in China.Risk factor of outsourcing in commercial is analyzed in chapter four. Inevitably, some risks follow the benefits which banks are enjoying in outsourcing. Therefore, outsourcing is not perfect, because the reasons above. Risk management is very important.Finally, the whole paper is summarized in this part. Both methods and suggestions is put forward, which include several aspect. Government and enterprise should develop the outsourcing industry. For example, human resources, policy, taxation is needed. If these measures could be taken, China's commercial bank is sure to be more competitive.