Research On The Operating Model And Efficiency Of Internet Banking In China

This paper focus on the characteristic business mode of MYbank and We Bank,and tries to answer whether the operating efficiency of the two banks exceeds traditional banks by the methods of case study and empirical analysis.First,there is a systematical review of Bof I(Bank of Internet Holding,inc.),which employs the business model of high-interest accounts,diversified products and property mortgage loans.Then this paper points out the reference of Bof I to the development of internet bank in China.Second,there is the detailed introduction of the business mode of MYbank and We Bank from four aspects of channel resources,technological advantages,product strategies and risk strategies.The research finds out that MYbank focuses both on proprietary business and platform intermediary,through sharing abundant customer resources and transaction information of Alibaba Group.MYbank uses cloud computing,artificial intelligence and big data to improve operation efficiency and to control risk when serving small and micro enterprises,farmers and financial institutions;While We Bank takes platform intermediary as its development goal.Based on Weixin and QQ,two major social networking systems of Tencent group,We Bank mainly engages in personal deposit and loan business.We Bank positions as the connector between consumers,financial institutions and other Internet platforms,based on the construction of ABCD(artificial intelligence,block chain,cloud computing and big data).Third,On the basis of the above case studies,this paper calculates the overall technical efficiency,pure technical efficiency and scale efficiency of Mybank,We Bank,urban commercial banks and rural commercial banks using DEA.This paper finds that the efficiency of Internet bank has increased rapidly in the three years from 2015 to 2017 for the whole banking system and two sub-business stages,and is significantly higher than that of traditional banks in 2017.For the stage of fund-raising and intermediary business,the technical efficiency,pure technical efficiency and scale efficiency of We Bank are significantly higher than those of MYbank.Different bank positioning leads to great differences in capital structure.Although the operating efficiency of MYbank is lower,they have stronger ability to take deposits and more abundant channels of funds.While We Bank is positioned as intermediate platform,which raise funds more through interbank deposits and bonds,therefore operating costs are lower.For the stage of fund utilization,The inputs of MYbank are fewer with similar outputs of net interest income and investment income as We Bank,thus higher fund utilization efficency.In 2017,the net profit of We Bank is nearly three times as much as MYbank.We Bank is positioned as platform intermediary of which the net income of processing fees and commission accounts for 30% of the total operating income.While MYbank is constantly improving its ability to take deposits to pave the way for proprietary business.Its deposit scale is expanding rapidly and it has the advantage of sustainable development.