Case-Tracking the Digital Transformation of China Merchants Bank Annual Report

China Merchants Bank released its 20 19 annual report on the evening of March 20th. Aside from the figures of assets and liabilities and profit performance, let's learn how this leading joint-stock bank in China has undergone digital transformation through the annual report.

The picture below shows the overall picture of the digital transformation of China Merchants Bank according to the annual report. It can be seen that both the top-level company-level strategy, the direction goal and the specific implementation path at the bottom are very clear, which has laid a good foundation for the success of digital transformation.

Next, I will disassemble and analyze it point by point, and learn more about the digital transformation road and achievements of China Merchants Bank.

1 policy

Strategic formulation is the starting point of digital transformation. Senior managers of enterprises need to set strategic goals according to the external macro-environment and their own business development needs. Strategy is not illusory, but can be implemented, which is beneficial to the development of enterprises.

20 14 China Merchants Bank defined the strategic direction of "light bank" and the strategic positioning of "one body and two wings".

1. 1 optical bank

-Background

20 14-20 16, the shortage of funds, assets and strong supervision is superimposed, and the bad ones are unbearable, and the anxiety of financial technology innovation begins to appear. Commercial banks are facing the dual pressures of capital and profit, while the downward trend of the real economy and macro-prudential constraints make the scale-driven growth model subjectively and objectively unsustainable.

-Essence

Do a good job in risk management while maintaining profit growth.

-Function

Lighting transformation of 1.2 integrated wing

Light banking mainly includes two points: light assets and light thinking.

Light assets

Bank assets are divided into two categories: corporate loans with heavy assets (high profits and high risks) and retail banking, corporate finance and interbank financial services with light assets (low risks and low profits).

It is precisely for the light asset business that China Merchants Bank has clearly defined the strategic positioning of "one body and two wings" and carried out the transformation of light assets.

First: retail banking.

As the "king of retail", China Merchants Bank has a huge number of individual users. Based on the two major App platforms of "China Merchants Bank" and "Pocket Life", we will expand personal consumption finance in multiple dimensions through customer big data analysis and intelligent risk control. At the same time, based on big data and artificial intelligence, according to customers' financial needs and risk preferences, the wealth management investment business will be rapidly expanded.

-Two wings: corporate finance &; Inter-bank finance

Under the general trend of financial disintermediation, banks need to explore and innovate corporate financial models, deepen their understanding of regional markets, advantageous industries and high-quality customers, focus on core customers, implement the "direct operation+industry franchise" model, and build a hierarchical and classified customer management system. Improve the financing efficiency of small and micro enterprises with financial technology, vigorously develop supply chain finance, and effectively integrate peer resources.

Think easily.

In his annual report, President Tian Huiyu said that "the most profound change of optical banking is optical culture". Organizational structure is the key to the digital transformation of enterprises, so the digital transformation of culture and structure must be completed first.

At the same time, banks should actively build an efficient and light business model, learn from excellent Internet companies, integrate online and offline channels in channel construction, focus on customers in product research and development, gain insight into customer needs, provide products and services around customers, and realize digital precision marketing.

2 target

Defining a goal is defining a battlefield. Faced with a highly uncertain environment, banks need to find their goals, lock them in and form their own core competitiveness.

Focusing on the goal of building "the best customer experience bank", China Merchants Bank focused on the formation of business management and control, persisted in optimizing the customer base and asset structure, strengthened the construction of technology empowerment, continued to explore multi-dimensional business models, accelerated the establishment of a full-customer, full-product and omni-channel service system, further promoted the digital transformation of retail finance 3.0, and seized the commanding heights of future development strategies.

Three ideas

3. 1 Openness and integration

President Tian Huiyu described these two points brilliantly in his annual report:

3.2 Take "creating value for customers" as the starting point, and promote the upgrading of customer experience.

In the digital transformation, banks need to "take customers as the center" and "create value for customers";

-Starting from the needs of customers

Banks have a large number of customer historical transaction data and online customer service records. We should make full use of these data for data analysis, tap the real needs of customers, meet their personalized needs, and shape the value-driven customer acquisition process.

-Customer value drive

Banks need to re-examine whether products and services are valuable, essential and attractive to customers from the perspective of customers. Only by constantly providing value to customers can banks maintain customer loyalty and enhance customer stickiness.

-Innovative customer experience

Customers are spoiled by Internet companies and financial technology companies (such as Ant Financial, WeChat Payment, etc.). ) and has begun to put forward higher requirements for the experience of banks. China Merchants Bank has built a professional user experience team, carried out experience innovation, paid attention to emotional connection with customers, and constantly brought the ultimate experience to customers.

-Connect the customer ecosystem

China Merchants Bank has built a relatively perfect open banking model, focusing on nine high-frequency scenes of transportation, government affairs and convenience, education and training, commercial catering, culture and entertainment, express logistics, tourism services, real estate services and life services, so as to create more contact points with customers and provide them with more comprehensive services.

4 paths

4. 1 Rebuild the digital system of retail finance under the guidance of "Polaris" indicator MAU.

Unlike many banks that set too many indicators for themselves in the digital transformation, China Merchants Bank clearly pointed out the only important indicator (Polaris indicator) at this stage-MAU, and achieved very good results.

At the same time, China Merchants Bank has improved the digital system of retail finance from three aspects:

-Digital customer acquisition

Based on China Merchants Bank and Pocket Life, this paper explores the construction of a digital customer acquisition model, and creates new customer acquisition growth points through joint marketing, joint marketing, scene marketing, brand advertising marketing, self-media fan marketing, MGM (customer recommendation customer) social marketing, etc.

-Digital operation

-Digital risk control

4.2 From the ecological point of view, reshape the professional service system of wholesale business.

-Continuously improve the customer classification management system.

Deepen the understanding of regional markets, advantageous industries and high-quality customers, focus on core customers, implement the mode of "direct marketing+industry joining", and build a hierarchical and classified customer management system. Do a good job of collaborative service among strategic customers, institutional customers, peer customers and supply chain SME customers, and realize the comprehensive improvement of customer service experience from credit strategy, product strategy, service strategy and resource allocation.

-Strengthening professional service capabilities through digital transformation.

-Take the industrial Internet as the key link to realize ecological management.

Open up the industry around three major directions: digitalization of accounts and payment systems, digital financing, and export of financial technology capabilities.

4.3 Taking process optimization as the starting point, we will continue to build the best customer experience bank.

-Rebuilding the retail customer experience monitoring system

The monitoring system is connected with 20 intra-bank systems, monitoring 923 customer experience indicators, realizing real-time monitoring and digital presentation of retail customer experience, and initially constructing the experience vane and service upgrade engine of retail customers.

Retail credit loan approval realizes the whole process of digital processing, shortening the time-consuming operation of approval.

Using the "end-to-end customer journey methodology", the whole process experience of retail customers' first business journey, MGM (customer recommendation customer) journey, agency business journey and credit card bill installment journey is reshaped. Shorten the total opening time of the first outlet, solve the pain points of many breakpoints in MGM process, reduce the steps of agency business signing process and improve customer satisfaction.

-A comprehensive diagnosis of the journey of key customers of the enterprise.

Constantly open online approval, risk, compliance and operation processes, and constantly promote the reshaping of various service processes.

4.4 With openness and intelligence as the core, we will continuously improve the basic ability of science and technology.

In the process of digital transformation of banks, it is necessary to clarify that financial technology is nuclear power and strengthen the construction of technology empowerment. The scientific and technological construction of banks needs to abandon the original traditional closed development environment and build an open technological ecology.

China Merchants Bank has improved its scientific and technological strength from the following aspects, which I will elaborate in the following article:

-Cloud-based

Accelerate the capacity building of cloud computing, accelerate the progress of cloud application, accelerate the transformation of system architecture, and create an open IT architecture.

-Big data

-Artificial intelligence

Increase the research and application of AI technology, build three AI cloud services of intelligent customer service, risk public opinion and computer vision, and launch three AI solutions of knowledge management, digital marketing and risk management and control to support the intelligent development of business.

-Blockchain

Improve and develop the standard chain and BaaS (blockchain as a service) platform ecology.

-open API

Constantly enhance the opening ability of banks, unify the "open API platform" for external services, support the safe and rapid output of APIs, serve different scenarios such as financial payment, AI, smart parking and smart medical care, and empower cooperative enterprises.

4.5 Focus on breaking the axis, empowering and reducing the burden, and optimize the organizational form and cultural atmosphere.

-broken shaft, empowerment and burden reduction

The biggest obstacle to digital transformation is not technology, but organizational wall. All departments work around KPI assessment indicators and interests, which leads to difficulties in resource coordination, poor cooperation among departments, poor organization of circular-flow, repeated waste of resources and so on. Without a complete internal ecological mechanism as a guarantee, digital transformation is impossible.

China Merchants Bank promotes cross-line integration of task-based project teams to promote talent flow, break the boundaries of traditional organizations and stimulate organizational vitality. Further promote the integration of "broken shaft, empowerment and burden reduction" and management services. Advocate a new corporate culture of "tolerating failure and rewarding success", so that every employee can do the right thing from the heart, not just pay attention to KPI.

-Lean and agile organization

The ultimate goal of lean agile organization is to realize business agility. Business agility refers to quickly responding to market changes and emerging opportunities through innovative business solutions, so as to gain the ability to compete and develop in the digital age.

When building a lean and agile organization, banks can refer to the seven core competencies and implementation roadmap abstracted by SAFE (SAFE will write them in detail in a later article):

China Merchants Bank continues to deepen the integration of business and technology, and comprehensively promotes the value-driven lean R&D transformation ... Scientific and technical personnel should form cross-functional teams with business departments to realize lean and agile transformation and continuously improve the quality and speed of delivery.

5 abstract

Traditional banks are facing great challenges from financial technology and challenger banks, so they need to formulate their own digital transformation strategies and goals as soon as possible.

Banks should take customers as the center and build a three-dimensional business ecology of "internal ecology+customer ecology+cooperation ecology".

5. 1 internal ecology

5.2 Customer Ecology

5.3 Cooperative Ecology

Reference article