Research On Credit Card Risk Management Of Commercial Banks In China

Credit card is one of the emerging financial instruments that yields high with high risk at the same time. The popularization of credit card is a reflection of economic development and cultural progress of a country. It is also because of merchants’marketing strategy and the change of people’s consumption concept. By the end of 2013, China’s issue volume of credit card reach 391 million, up 15.3% from a year earlier. At the same time with the sharp increase of card issue volume, credit card risk becomes more and more prominent. Now the commercial banks face a troublesome difficulty:how to conduct the business of credit card profitably without undertaking too much risk, or how to strike a balance between risk management and profitability and how to prevent credit card risk comprehensively and efficiently.Although the credit card business develop rapidly in China, there also exist many defects in the aspect of risk precaution. Compared with credit card industry of developed countries, we have still more shortcomings. China has a big gap with developed countries in the construction of social credit system and commercial bank internal risk management and precaution. So, to study the methods of credit card risk management is of great significance to the healthy development of our country’s credit card business theoretically and practically.Using case analysis method and comparative analysis method, paying attention to both qualitative analysis and quantitative analysis, this paper introduces systematically the development history and the current situation of credit card business as the foundation of the paper. Based on that foundation, the paper analyzes the risk of credit card systematically, especially the risk of malicious cash and the corresponding solutions. Secondly, this paper analyzes the experiences and lessons of foreign countries using comparative analysis method. And taking ICBC Laiwu Branch as an example, this paper analyzes the problems of risk management specifically and proposes solutions from the perspective of practice. At last, we reach the conclusion and proposals to perfect China’s credit card risk management for the purpose of guiding commercial banks to prevent risk most effectively while pursuing profit maximization. And we also put up with the four aims in risk management that banks should try to accomplish.