Study On Innovation Of Personal Financing Product Of Commercial Bank Of China

In the21’st century’s economic globalization tide, the finance globalization as an important power to the economic globalization, provide the better outer condition and the favorably opportunity to the rapid development of our commercial bank. The bank financial products as a kind of products, become a very important investment and the growing point of bank’s profit. From last century70’s, the west countries started issuing the financial products, the international trend as an essential element pushed the products in our country. People’s per capita income of Chinese residents is growing, according to the People’s Bank of China statistics, as the end of October2013, savings deposits of Chinese residents reached44trillion. And in recent years, China’s rapid expansion of the affluent reached1026million. Good growth in wealth and rapidly expanding affluent of Chinese residents makes them increase the demand for the preservation and appreciation of personal assets, creating a vast market of personal finance business, objectively forming a major personal financial demanding groups.As a personal financial product with a large quantity, low-risk, wide range, stable income and other advantages, it occupies an important position. Since the1970s, global commercial banks under the wave of financial innovation, personal financial services gained rapid development. According to statistics, the average profit of the personal financial services of American banks is about35%, the average annual grow earnings is about12%-15%. In Hong Kong, close personal financial services have become the main focus of competition in the banking sector. Major banks, such as Citigroup, HSBC and Standard Chartered Bank have launched their own financial packages for different customers. In September2004, the CBRC formally approved the commercial banks to conduct RMB Personal Financial Services.. In early2005, four state-owned commercial banks have access to operating RMB financial products. Currently the personal finance business is growing rapidly, the prospect of the market is very broad.With the rapid development of China’s economy and finance and the increase of household wealth, the financial products are increasingly becoming an important profit growth. But now China’s commercial banks personal financial product is badly homogeneity. Moreover, the foreign with rich experience in personal finance is entering the domestic financial market. It exacerbates the competitive pressure on the domestic market of personal financial products. How to win the fierce market competition, consolidate and expand market share, we must actively formulate strategies to meet the market demand for innovative personal finance products.This paper introduces the background and significance of the research in the first chapter, put forward the research ideas and research methods, then summarize the domestic and foreign literatures. Finally it describes the innovations of this paper.In the second chapter, first of all it gives the related concepts of personal financial product innovation. Financial innovation theory and the life cycle theory is the theoretical basis. Secondly, the personal financial product innovation in theoretical analysis, this paper focuses on the analysis of demand and supply of products. In this paper, from the perspective of investors, based on each bank personal financial products to investors, financial goals, financial income level, risk preference, age, occupation, it discusses the demand for personal financial products in detail, and the personal financial product supply situation analysis is discussed from the commercial bank angle. Generally speaking, China’s commercial banks personal financial product supply and demand in the amount and level is not balanced, which requires banks to actively improve the capacity of financial innovation, adjust the supply mode and strive to make supply and investors’ demand match.In the third chapter, this paper introduces the development status of personal financial product innovation of commercial banks in china. In the practice of personal financing product innovation, the Commercial Bank of our country launches many innovative products. These products innovates in different aspects, such as the structure of investment, finance, currency, investment period, the type of income and risk prevention. This paper lists some typical innovative products and introduces the innovation points. Then it sums up the development trend of China’s personal financial product innovation. However, there are many problems in the development process. For example, the structure design of products is too concentrated, independent innovation is rare, the product homogenization phenomenon is serious and the lack of professional personnel of high quality innovation.The fourth chapter uses the econometric method to analyze the profitability of innovation of personal financial products by empirical study. It introduces the definition of the profitability of innovation of personal financial products. The main purpose of personal financial product innovation is to increase the bank’s income. It is a complex variable factor, including direct benefits and indirect benefits. Direct income refers to the commercial banks obtained income which brings by the personal financial product innovation and can be measured by money. From the connotation of innovation returns, we can find that the innovation of the personal financial product revenue is influenced by many factors. This paper mainly from the basic elements of personal financial products itself and the issuing bank type to analyze the main influencing factors of the personal financial product revenue.The fifth chapter based on the above results makes the conclusion, and according to the practice of personal financial product innovation of commercial banks in China, puts forward some countermeasures for promoting the development of innovation of the personal financial products. Commercial banks should work hard to enhance the capability of product innovation and meet customers’ demand for diversification and individuation. Creating a professional brand to provide high quality product and service is important. It must cultivate high-quality talents and develop professional management personnel.The development of financial products of commercial banks is the general trend. Although China starts late, the speed of development reflects the importance of financial products in China’s banking industry. Accelerating the innovation of personal financial product can not only improve the profits of commercial banks, but also can improve the core competitiveness of commercial banks. Therefore, it’s important to speed up the innovation of personal financial products, constantly overcome problems of innovation, further improve the financial product innovation system, maintain the sustained and stable development of the financial market.