C Bank Division System Reform Study

After China's accession to the world trade organization, the financial industry of China saw a fast-pace reform and fierce competition. As the gradual opening-up of the financial market, the financial industry of China will see rare opportunities of development as well as unprecedented challenges.The author is working at C bank which now is one of the small and medium-sized commercial banks. C bank, previously an urban credit cooperative, adopts the strategy to serve the market from the regional to the national. The overall size and operational ability is not as good as large state-owned commercial banks, foreign multinational financial groups and many foreign shareholding commercial banks. However, with the contemporary demand increasingly diversified and personalized, such a bank has wide space to thrive. C bank, setting firmly on the concept of mamagement--- "based on small and medium-sized enterprises (SME), based on local regions", has maintained its market competitiveness and underwent a high-speed development in recent years. Meanwhile, the weakness of many aspects such as the bank's organizational structure, business structure and human resources, is gradually raveled during the process and becomes an obstacle of the bank's further development.The author, who has been working in the bank for more than ten years, from the initial grass-roots staff to today's middle-level manager, witnesses the process of reform from the bank's equity division reform and the introduction of foreign strategic investors to trans-regional development and comprehensive operation. Te author was aware of the significance of innovation, exploration and improvement of thinking mode and system. As a result, the author has been thinking about these years how to view the historical trend of the reform, how to accurately pick out problems which need to solve imperatively and what reform plan can suit the practical situation of C bank best.The development history and studies of the global banking industry have shown that sound organizational structure is one of the core competences of the commercial bank. As the continuous improvement and efficiency become more and more significant in contemporary market competition, the restructure of bank organization becomes important impetus to the bank's development. The level of integration and the operation efficiency, which deeply affect the development of the organization, becomes new topics of core competitiveness construction. "Divisionalization", which is the main development direction of organizational structure model of western commercial banks, obtains universal attention and are constantly put into practice in the organization-restructuring process of domestic commercial banks.Adhering to the principle of gradual reform and implementation, C bank started its sector reform in 2008. The medium-term goal of the bank's sector reform is transformation from "the horizontal primary, the vertical subsidiary" to "the vertical primary, and the horizontal subsidiary". The goal was set so as to prepare well for the full implementation of the sector reform. Because the bank is strategically based on SMEs, it sets the SMEs sector as the reform exemplary. However, the sector reform of domestic commercial banks is still in "pilot" stage and there is no successful precedence, so the bank will face many problems and challenges when implements the reform process.From the author's perspective, the bank should integrate the sector reform which can facilitate solving a series of problems, to its strategic planning and set it as the kernel of the reform. The experience of solving problems which may appear in the process of reform has great practical significance. So the study of the sector reform of commercial banks mainly includes the following aspects:1. From the basic theory of the organizational structure of the commercial banks, the author will elaborate on the development evolution of theories of the organizational structure of the commercial banks, the research development of the organizational structure of foreign commercial banks and their sector reform processes. Besides, the author will summarize the lessons and enlightenment in those processes and analyze the weakness and strength of the sector reform here in China.2. Taking C bank for example, the author will analyze the disadvantages before sector reform of C bank. Using the empirical research method, the author reveals the background, incentives, and feasibility of the sector reform from aspects of the bank's internal and external market environment, the pressure of business transformation, etc.3. The author will introduce the current situation of the sector reform of C bank and analyze its effectiveness. The author also analyze the problems in the sector reform from the adaptability to the reform of C bank, performance evaluation system and the contribution of IT information technology, etc.4. Referring to the experience of the organizational structure reform of foreign commercial banks, the author will analyze the existing problems during the reform process of C bank and put forward corresponding measures to handle those problems.The author believes that, based on the factual situation of C bank's sector reform, on one hand, the study, with adequate preparation for theory, will analyze the applicability of the sector reform to C bank from the perspective of theory; on the other hand, by the analysis of the pilot project, the author will put forward suggestions for future reform strategy, especially for other business reforms. At the same time, the research result has certain reference significance for the sector reform of other Chinese small and medium-sized commercial banks:firstly, the choice of reform sector and strategy should be based on the analysis of the inner and outer environment and the bank should always focus on the core strategy. Secondly, in the process of strategy implementation, resolute guiding ideology should be adopted and measures should be adjusted according to the actual effect. Thirdly, human resources strategy, which includes not only staff reserves and escalations, but also reform of the thinking mode, target adjustment and strategic consensus, should be integrated in the whole strategy.Due to the beginning stage of sector of C bank, there are both policy obstacles and difficulty in data acquisition. Also, the analysis outcome, which is based on interview of related personnel, will inevitably incur the situation that draws conclusion from the part. At the same time, because of the pressing preparation time of the thesis and the limitation of the author's research ability, there are many deficiencies. As a result of the study, the author obtained a lot of theoretical knowledge, found the method to combine the theory and reality. I believe in the future I can provide more significant suggestions and ideas to the sector reform to C bank and other commercial banks.