Research On The Innovation Of Personal Financial Products In Commercial Banks

With the development of economic and society, residents and the enterprises have more and more demand to financial products. Financial product innovation has become a very important issue. In this paper, using the life cycle theory and Schumpeter’s innovation theory as the theoretical basis, we talk about issue of the financial product innovation in China’s banking industry.First of all, in the review of domestic and foreign Banks in the process of the development of financial products, we found that the diversity and personalized of financial innovation has become the main characteristics. In the United States, for example, the United States individual financing business experience three stages: initial period, the expanding period and ripe stage. In recent years, the development of the personal financial management business reached into mature stable stage, the bank has gradually developed into a comprehensive function of "financial supermarket". In China, since1996, China Minsheng Banking first set "personal finance center" in Guangzhou branch. After decades, banking financial products have a big development. In recent years, foreign financial products pay more and more attention to market segment, product innovation, customer relationship management and employee quality improvement, etc. In China, the financial product development appeared below trend:bank financing products are more and more diversity and personalized, RMB kind of financial products is becoming the main body of the financial product, financial products term structure design is more and more short-dated, part of the financial product yield rising high returns. Secondly, this article focuses on the analysis of supply and demand of the financial product innovation and the purpose of innovation, power, model selection. In our country, because of the different of the income level of resident, risk preference, financial knowledge structure, age, financial products demand presents the diversified needs. Because of the innovation is insufficient, banking financial product cannot meet their requirements. How to realize the innovation of financial products? This paper, from the financial product innovation power, purpose, method and the benefits and risks of assessment are discussed in this paper. Financial product innovation power is from the main competitive pressure and to the pursuit of an excessive profit. And the purpose of innovation is in order to adapt to the fierce competition, obtain excessive profit. Innovative ways are "brain storm law" and the improved method, etc. The mode of innovation choice is the main elements innovation and elements combination innovation. In addition, financial product innovation risk and benefit assessment is necessary. Financial product innovation risk includes market risk, legal risk, business and operational risk and technology innovation risk. In the design phase of the products, need to considerate of the possible risks, and design risk sharing, the risk transfer and stop mechanism. Bank financing products in the market, product innovation face customer demand change, risk, new technology changes, the system constrain challenges. The future financial product innovation have the trend that may financial products personalized or differentiation will become more prominent, with "customer demand oriented" of the financial product sales model will gradually perfect, bank financing products to "electronic" direction,"professional" financial product research, development and sales will be attached much importance.Again, this paper analyses the financial product innovation expected rate of return and the bank size, term structure, the relationship between risk types. The model of the empirical test shows term structure and types of financial products have the significant influence on the expected rate of return, and the bank size to finance products have no significant impact. Finally, with the development of the economic, social, and technological conditions, finance products in the market there are more serious product homogeneity in China. For financial product innovation in the future, this paper puts forward some Suggestions, such as pay attention to market demand research and focus on the change of market demand, pay attention to the risk of financial products scattered and transfer mechanism design, the introduction of "innovative" personnel, establish a professional sales team, and pay attention to the application of network information technology, etc.