Comparison Of Sino-US Commercial Banks Personal Financial Services

Since the reform and opening up, GDP has rapidly grown in China. Asthe reform of income system and income distribution system was promoted and thoughtof “enriching people” was proposed, national strategic plans, on one hand, shouldexpand domestic demands for investment, and on the other hand, should furtherstimulate and drive the economic growth by consumption these years. In this case,higher requirements are proposed for the development of private banking and theimplementation of strategic plans guarantees the future development prospects ofprivate banking. As the middle class is emerging and residents’ income is constantlyincreasing in China, people become more aware of maintaining and increasing value,with diversified, specialized and personalized demands for financial planning servicesand financial products. In addition, enterprises get less dependent upon banks due todiversified financing channels, while the development of direct financing market andresource plunder directly lead to the decline of banks’ earnings. As a consequence,banks are forced to transform their overall structure by changing their traditional profitmodel (relying on fixed interest income) into developing intermediary business.This paper compares personal financial planning services of Chinese and Americancommercial banks in terms of policy environment, business development, competitionenvironment and financial products, etc by comparative analysis. It points out thatChinese commercial banks are mainly backward in personal financial planningbusinesses in following aspects, including high homogeneity of personal financialplanning businesses, limitation of financial planning services to sales of financialproducts, high threshold, narrow promotional channels for financial products andincomplete disclosure of risks which are primarily attributable to following points.Firstly, separate operation limits the development of personal financial planning services and banks rest satisfied with stable interest spread between loan and depositrates. Secondly, close attention hasn’t been paid to personal financial services. Thirdly,personal planning teams are not scientifically constructed and there is a shortage oftalents. Fourthly, Chinese banks are comparatively more backward in financialinnovation and product development.Aiming at these issues, this paper proposes improvement suggestions forsupervision departments and banks. Supervision departments shall intensify the reformof financial institutions, develop personal financial planning markets for banks, guidecommercial banks to standardize financial planning services and maintain soundsustainable development. Besides, these departments need to improve supervisionsystems, standardize and promote cooperation between banks and trust companies. Forbanks, it is necessary for them to focus on the development of financial planningservices while transforming business strategies under the background of interest ratemarketization, and implement diversified competition strategies. Furthermore, there is aneed for banks to construct standardized and specialized financial planning teams andclarify performance appraisal. Meanwhile, they shall enrich their marketing andstrengthen publicity, etc. Only in this way can the development of personal financialplanning services be further facilitated in Chinese commercial banks.