Research On Retail Business Transformation Of Chinese Commercial Banks

The core of the economy in the 21 st century is the knowledge economy,and one of its basic characteristics is the individualization and subdivision of the service industry.As the core industry of the modern service industry,the financial industry has been spurred by the trend of the new economy and is constantly undergoing drastic changes.China’s traditional wholesale financial services can no longer meet the needs of the market,and customers need convenient,efficient,and comprehensive financial services for individuals.As the new economy continues to mature,the wealth of residents continues to grow,and the level of banking automation and electronicization has rapidly increased.The retail banking business is characterized by low capital consumption,stable customer income,broad innovation space,and scattered business risks.It is increasingly valued by modern commercial banks and has become one of the areas with the most vitality and development potential.Its rise has become an inevitable trend for commercial banks to achieve sustainable development in the new era.This article first summarizes the types and characteristics of retail business of commercial banks,and analyzes the development status of domestic commercial banks’ retail business.Secondly,this article selects 140 commercial banks to conduct an empirical analysis of the panel data of their retail business operation data from 1999 to 2018,and studies the impact of retail business on the profitability of commercial banks.The results show that personal loans significantly reduce the ROE of commercial banks.The impact of personal deposits on the ROE of commercial banks is related to the size of the bank: For medium-sized commercial banks,personal deposits reduce the ROE of commercial banks;for large commercial banks,personal deposits increase the ROE of commercial banks.In order to solve the endogeneity problem,the thesis adopts the independent variable that lags one period as the instrument variable,and the results obtained are consistent.In addition,considering the time period,the impact of personal loans on the profitability of commercial banks after 2010 is negative,but the impact is gradually weakening,which also shows that the current transformation of commercial banks ’retail business has achieved certain results.After 2014,due to the rise of third-party payment,the positive impact of personal deposits on the profitability of commercial banks is weakening.Then,the paper summarizes the excellent experience of different commercial banks’ retail business transformation,Finally,the paper starts from a strategic level and overall layout of commercial bank retail business transformation arrangements.The main contributions of this article are: Employ the micro data of China’s commercial banks to empirically analyze the impact of commercial banks’ retail business on bank profit;The system summarizes the excellent experience of domestic commercial banks’ retail business transformation,and puts forward targeted transformation development suggestions in combination with the actual factors such as bank size.