Research On The Effect Of Information Technology On Chinese Commercial Banks’ Innovation

This study in-depth analysis commercial banks’ innovation activities based oninformation technology, explores the impact of information technology on commercialbanks’ innovation, reveals the key driving faction of commercial banks’ innovation, andexplores the types of commercial banks’ innovation and the outputs of commercial banks’innovation. This study also takes the Commercial Bank of China which is the leader of theinternational financial area as a case to reveal the innovation types of Commercial Bankbased on IT background and their significance to gain a competitive advantage. Specifically,the main concern of the study reads as follows.The main concern of those researchers explore the front driving factors promoting theuse of Internet banking, explore the key elements of banking services innovation, process ormodel and reveal the impact of information technology for banking services innovation.Yang Ping and Wu Xiaolan, Wen Yongming, Li Yu and Li Ying are representative of thedomestic research scholar.The study extracts the representative scholars and research content after systematiccollating existing research literatures. Researches in abroad, the representative scholars areAkamavi, Drew, Devlin, Santomero and Trester. Domestic scholars’ research focuses on themost is to explore the role of information technology in the commercial banks in the processof innovation and its impact, it is also concerned about the characteristics of the commercialbanks or financial innovation, significance and problems antecedents of commercial banksand innovative commercial banks in the context of the IT security risk analysis.Subsequently, the development of China’s commercial banks is facing a variety ofenvironments, including policy environment, market environment and competitive landscapefor further analysis. In the policy environment, China’s commercial banks facing strictfinancial regulation, falling interest rates, transition in economies and financial laws andregulations are gradually improving, the commercial bank’s financial policy is not uniform,the lack of the institutional basis of fair competition environment. In the market environment,China’s commercial banks faced with rapid economic development, financial services gapsurge, large state-owned commercial banks are still in a monopoly position, but by theimpact of small and medium-sized banks, the challenge of non-financial institutions with fierce competition in the industry and the extrusion of other banks. With the successfulrestructuring of China’s four major state-owned banks, as well as open to foreign financialmarkets after accession to the WTO, China’s commercial banks formed a high degree ofmonopoly by the four major state-owned commercial banks which include the Bank ofChina, Industrial and Commercial Bank of China, Construction Bank and Agricultural Bank,joint-stock banks and foreign banks continue to join and the impact of new competitivelandscape.In this study, the most critical topics as depth is to explore the influence by theinformation technology innovation on China’s commercial banks. Through the analysis, thestudy found that information technology for the commercial banks will eventually bereflected in the corresponding outputs, including more lucrative operating profit forcommercial banks to increase their market share to gain competitive advantage and enhancethe size of the organization and with to economies of scale and access to higher customersatisfaction to cultivate customer loyalty. The information technology has an effect oncommercial banks predominantly through the path that promotes them to do various types ofinnovation activities. From the point of view of innovation activities of the commercialbanks, information technology including the Internet, mobile communication technology andcomputer technology, rapid changes of these IT actuator commercial banks is the mostfundamental driving force of innovation However, the change of information technology hasalso led to customer needs, competitive environment and the bank’s own self-sense of crisis,then direct drivers of innovation activities have indirectly effect on the innovation activitiesof the commercial banks. Therefore, integrated information technology, innovation activities,driving force of innovation and innovation output, the corresponding theoretical modelconstructed in this study. So afterwards, the response to this theoretical model, the studydiscussed in detail the impact of information technology innovation for the driving force ofcommercial banks, the impact of the driving force of innovation for commercial banks andthe relationship between commercial banks innovation and the corresponding output.The Industrial and Commercial Bank of China as a case in this study, in-depthsystematic analysis of the influence and role in the process of information technologyinnovation of commercial banks. As a giant in the field of finance, the Industrial andCommercial Bank of China has been in a leading position in China’s commercial banks.Therefore, the Industrial and Commercial Bank of China as for a case, it can make a highrepresentative and convincing. Industrial and Commercial Bank of China listed at the beginning of the year ranked only fifth, followed by several years of rapid development sothat it became the world’s largest commercial banks, as well as become the most profitablecommercial bank. Industrial and Commercial Bank is able to achieve these results which linkwith its ongoing innovation, seize economic globalization, internationalization strategy areinextricably linked. Industrial and Commercial Bank attaches great importance to productand service innovation, and it is good proof that it is the first in the country to set up apost-doctoral research stations. This study analyzed from multiple angles of the product orservice innovation. Organization and management innovation, business model innovation,service system innovation, as well as other forms of innovation in information technology,different forms of the innovation process. In this study, the case studies validate the patternwell that the information technology proposed in this study influences the information ofChina’s commercial banks.The results of this study show that modern communication technology, the Internet andcomputer technology is affecting commercial banks to innovate technical support.Transformation of these information technology has greatly changed with changes incustomer demand, changes in the competitive environment and commercial banks a sense ofcrisis. These are keys to drive commercial bank to innovate and will affect their product orservice innovation, organization and management innovation, business model innovation andservice system innovation. The ultimate goal Commercial banks innovate is to maintain acompetitive advantage, to obtain higher returns. Therefore, the output of innovation activities,contain higher returns, higher market share, higher customer satisfaction and rapid scalegrowth.This study has more important implication for the innovation of China’s commercialbanks. With China’s accession to the WTO, domestic financial markets are the progressiveliberalization. Constantly, under the impact of the entry of foreign commercial banks andjoint-stock banks and other financial institutions, domestic commercial banks facingunprecedented challenges. In particular, foreign commercial banks have proven managementexperience and strong IT processing power, which makes its operations more efficient andmore profitable business. Foreign banks with long-term experience in the context of ITmarket operators and domestic financial institutions are still in its infancy. The backgroundand situation, the domestic commercial banks must seize the opportunity, in order tomaintain the competitive position through constant innovation. Concretely, China’scommercial banks should be from the following aspects to enhance its competitive advantage, including grasping customer needs and its direction of change in informationtechnology, changing the traditional business model of development, and actively seekingbusiness model innovation, focusing on workforce and conducting projects for a culture ofinnovation construction projects, improving their management level. At the same time,commercial banks should encourage the building of a culture of innovation, and encouragethe staff’s creativity, encourage the use of new methods, so as to enhance the overallinnovation capability of enterprises.