The Research Of Personal Financial Product Innovation In China’s Commercial Banks

With the sustained and rapid economic development, people’s income level and their disposable assets continue to increase and people’s demands of personal finance also become increasingly strong. With its huge market profits, personal financial business attracts the attention of various commercial banks, even including the foreign capital banks. Personal financial business has developed as one of the main businesses of commercial banks in developed regions. It affects bank’s development trend and is also a long-term management strategy for a bank. The improvement of personal financial business ability can greatly enhance the competitiveness of commercial banks. The sound development of personal financial business of commercial banks can meet the financial needs of customers more accurately and promote the realization of the customer’s financial goals.Personal finance is a gradually mature business with rampant demand in our country. Commercial banks in our country not only face the trade competition in their own fields and other financial institutions, but even more urgent, they need to accept the challenges from foreign financial institutions. Especially with the increase of residents’ financial needs and the massive invasion of foreign capital banks, such three aspects as how to develop personal financial products to bring customers steady and high profits, how to provide customers with better and more advanced comprehensive services according to the needs of customers, how to firmly own the personal customer group with huge market potential have become the important factors by which our commercial banks transform their management strategies and seek new profit points and the new perspective and new standard of sustainable development. Under this circumstance, we must vigorously promote the development and innovation of personal financial products of our commercial banks.However, in recent years, under the background of the related policies, economic development, a lot of problems occur in personal financial products of commercial banks in our country and the business itself is fraught with problems and bank financial business suffers from some shrinkage problems. Due to the unsteady factors of national financial foreign exchange, personal finance business also suffers from the attack of short-term speculators. For example, the popular event of "China Boyle" buying gold fever exposed the fact that the personal investment lacks the effective way. For these reasons, we should review bottleneck problems in the development of personal financial products. What’s more, because of the limited kinds of financial products, low yields, deficient development, immature development of personal finance market of our commercial banks and also partly due to the limitation of law and policy, the personal financial products of our commercial banks have been in a relatively weak position and cannot effectively provide customers with the real value-added services and should meet people’s needs through constant innovation. The key to success for the banks in market competition is how the banks can transform the personal finance business from the low-level homogenized competition to the competition of innovative ability.On the basis of related documentation and research results in China and abroad, using the methods of documentation, comparative analysis, case study and combination of theory and practice, I will start from the developmental stages of personal financial products in China, define the conceptions such as financial innovation, and have a deep understanding of the theory of financial innovation and life cycle theory. First I will analyze the problems existing in personal financial products in our commercial banks. And then, with such examples as some foreign banks’ development of financial products in China and the golden sunflower finance of China Merchants Bank, I will thoroughly analyze the successful cases of different commercial banks and draw lessons from them. Based on this and combined with the specific conditions of financial product market in China, as well as the related theory and experience of the foreign banks, I will propose the specific suggestions of improving personal financial product innovation of commercial banks in our country and provide reference for the practice of personal financial product innovation of commercial banks.Through the studies and discussions in this paper, I come to the following conclusions: First, the development of personal financial business of commercial banks can optimize business types of commercial banks, increase operating income of commercial banks, increase the profit of commercial banks and attract more customers with high quality so as to promote the competitiveness of commercial banks. As the leading business of commercial banks, personal financial business occupies an important position in the business development of commercial banks. Second, through the comparison of the development of personal financial products in commercial banks in China and abroad, studying the development and innovation experience of personal financial products in the foreign commercial banks, we can learn such aspects as management ideas, enhancing product innovation, attaching great importance to customer relationship management and professional financial management team. We should do our best to reduce the gap in the personal financial product market in China and abroad. Only by doing this, can we improve the level of our own and develop personal financial business of our commercial banks in a more mature and stable direction. Third, for personal financial products of commercial banks in our country, problems exist in the understanding of personal financial products, financial product design, marketing level, financial talents, and technological means. At the same time, such factors as the restriction of the decentralized management, deficient credit system and underdeveloped financial market also restrict the development of personal financial business. Fourth, to the current problems existing in the development of personal financial products of commercial banks in our country, we should take improvement and innovation measures, including: strengthen market research and ascertain their position in the market; carry out market segmentation and implement differentiated services based on life cycle theory; encourage innovation and develop new types of financial business; regularize product sales behavior and improve the comprehensive qualities of financial personnel; improve the risk control of personal financial products; reasonably improve price mechanism of financial services and increase the investment in technical research of financing business.