What competition does the development of Internet finance have for the development of commercial banks?

Trend 1: March into direct banking. At present, about 20 banks such as Bank of Beijing, Minsheng Bank, Shanghai Bank, Industrial Bank and Baoshang Bank have launched online direct banking, as shown in Table 1. The direct driving force for commercial banks to launch online direct banking comes from the rapid rise of internet finance with balance financing as the core. Therefore, online direct selling banks that have been put into operation without exception regard balance financing as their main and necessary product. It is the main reason why many small and medium-sized banks favor direct selling banks. From a deeper perspective, with the in-depth application of Internet and mobile communication technology, social consumption habits and business models will undergo profound changes, which will lead to changes in financial behavior patterns, which in turn will lead to changes in service models of commercial banks. Online direct banking is the advance layout of commercial banks.

Trend 2: build an e-commerce platform. Up to now, major large commercial banks including China Construction Bank, Industrial and Commercial Bank of China and China Merchants Bank, as well as small and medium-sized banks such as Chengdu Bank and Shanghai Rural Commercial Bank have all opened online shopping malls, as shown in Table 2. If the motive force for commercial banks to set up online direct banking comes from the diversion of customers and business of commercial banks by internet finance, then the motive force for opening online shopping malls comes from the change of traditional financial business model by internet finance. Alibaba, JD.COM and others rely on the transaction data of a large number of merchants and users accumulated in online shopping malls to innovate their operation modes and enter the financial field, posing challenges to commercial banks. Innovation relying on big data is increasingly becoming the future development direction of traditional finance. In the cooperation with Internet companies, it is the final choice for commercial banks to build their own online shopping malls and accumulate transaction data by themselves when they cannot obtain first-hand transaction data.

Trend 3: the transformation of online banking. The online banking of commercial banks is the earliest "internet finance" in China. Because of its convenience, flexibility and high efficiency, it has been highly praised by commercial banks and customers, and has achieved rapid development in recent years. However, because its design concept is the extension of the bank counter and the sales channel of products, online banking is more like an operation platform, which only faces its own customers, and its funds are closed in the bank, so it does not have the functions of obtaining customers and operating. This is the biggest difference between it and the current Internet finance. The convenience of operation and the richness of products are far from the so-called application scenarios. Based on this, in recent years, commercial banks have promoted the transformation of online banking from closed to open. First, they developed exclusive products for online customers, enriching the product line. The second is to create application scenarios, find entrances, and increase customer acquisition functions; The third is to introduce internet thinking, simplify the process and improve convenience; The fourth is to integrate online and offline channels to form the advantages of online banking.

Trend 4: Develop financial services based on social platforms. The wide application of Internet, mobile communication and big data technology not only brings new competitors, but also brings new opportunities to commercial banks. With the convenience of social platforms and the huge customer base accumulated, more and more commercial banks have launched WeChat Bank, Weibo Bank and CreditEase Bank. On the one hand, enrich product promotion and brand communication channels, and improve the pertinence and effectiveness of publicity; On the other hand, based on the social platform, we will integrate the functions of online inquiry, transfer payment, transaction reminder, financial purchase, and card-free withdrawal, build a new service model, and improve our service ability to customers. In addition, through the development of exclusive products such as micro-financing and micro-financing, the technology of automatically obtaining WeChat customers and pushing product information is introduced in business premises or other places to achieve active customer acquisition and enhance business capabilities.

Trend 5: Vigorously expand mobile finance. An important reason for the rapid development of Internet finance lies in its convenience and high customer experience. It is a positive response for commercial banks to vigorously expand mobile finance. To sum up, there are the following practices: first, the traditional online banking is mobile, mobile banking is launched, and a handheld mobile financial service platform is built; The other is to cooperate with cross-border companies such as Internet companies to launch special mobile finance apps, integrate financial services, consumption, entertainment and other scenarios, and build a mobile finance ecosystem, such as BOC Shang Yi launched by China Bank and Moonlight Box launched by Guangfa Bank. Third, represented by Shanghai Pudong Development Bank, it cooperates with mobile operators to launch near-field mobile payment products and services based on NFC-SIM card mode.

Trend 6: Develop online supply chain finance. The key for Internet companies such as Alibaba and JD.COM to enter the financial field lies in accumulating upstream and downstream enterprises of commodity supply and marketing through e-commerce platform, forming a complete supply chain or industrial chain, and then accumulating transaction information. This is the core for domestic commercial banks to expand supply chain finance for SMEs in recent years. Affected by this, commercial banks have developed online supply chain financial products. On the promotion path, one is cooperation with third parties, such as cooperation between CITIC Bank and Haier gooday Internet of Things platform, and cooperation between China Postal Savings Bank and 1 store in e-commerce supply chain financial products; The other is to develop products independently, such as China Merchants Bank launching online supply chain financial solutions for e-commerce and logistics industries. Another noteworthy trend is that online supply chain finance is more intelligent and open. From fund management to counterparty management, banks not only provide enterprises with traditional financial services such as financing, settlement and payment, but also integrate financial management, order management and even accounting treatment.

Trend 7: Intelligent upgrade of physical outlets. With the in-depth application of the Internet, face-to-face counter transactions at outlets are increasingly replaced by self-service transactions and online communication. The emergence of Internet finance has further aggravated this trend. In order to adapt to this trend, in recent years, commercial banks have begun to upgrade their physical outlets intelligently. First, re-layout functions and increase intelligent self-service transaction equipment, such as VTM, ITM, self-service card issuing machine, etc. Even create unattended intelligent lighting outlets to break the time limit of transactions; The second is to introduce intelligent elements into traditional business processes, such as providing services to customers visiting outlets more efficiently and conveniently with the help of mobile pad to enhance customer experience; The third is to integrate online and offline channels and services with Internet technology to create a new model of O2O financial services. In addition, some commercial banks are actively exploring cooperation with coffee shops and shops to launch new outlets.

Trend 8: offline business is online. It is manifested in three aspects: first, it enriches online banking products and realizes the synchronization of offline products, mainly in the field of wealth management business; The second is to develop online loan business, realize online application, acceptance and approval, and improve the efficiency of handling, such as ICBC's easy loan, Shanghai Pudong Development Bank's online loan and CCB's fast loan; Third, for a certain business field, integrate all relevant offline services, build an online comprehensive financial service platform, such as E-Home, a small enterprise of China Merchants Bank, develop online financial products for small and medium-sized enterprises, such as online credit rating, easy online loan and easy settlement, and realize the docking with the bank's middle and back-office credit management system and customer relationship management system, thus forming a process from customer contact, follow-up marketing, business opportunity exploration, product sales to online business handling.

Commercial banks face six major problems when they enter the internet finance.

Question 1: Give full play to the advantages of unequal supervision and restriction. The rapid rise of internet finance has largely benefited from the tolerance of supervision. Whether it is Yu 'ebao, Beijing Baitiao or bill financing, they are all de facto financial products, but Internet companies engaged in these businesses are still defined as commercial enterprises and are not included in the scope of financial supervision. Commercial banks that also carry out this kind of business need to accept strict capital supervision and product access approval. This kind of unequal supervision greatly increases the cost of commercial banks to expand internet finance and limits their innovative activities. More importantly, this kind of supervision restricts the advantages of commercial banks. Compared with Internet companies, commercial banks have rich experience in financial business, especially in designing wealth management products and developing asset management business. However, at present, the supervision requires commercial banks to sell wealth management products face to face and sign agreements for the first time. As a result, commercial banks cannot use the Internet to conduct wealth management business like Yu 'ebao. The advantage of Internet companies lies in technology and platform, so cooperation with financial institutions to carry out wealth management business is not subject to regulatory constraints, which not only gives full play to the technological advantages of the Internet, improves customer experience, but also bypasses regulatory constraints, resulting in unfair competition between commercial banks and Internet companies. If the problem of remote account opening cannot be fundamentally solved and the virtual electronic account is given the same identity as the traditional bank account, this problem will always exist.

Question 2: Cultural concept affects innovation efficiency. The biggest characteristics of Internet finance are fast innovation speed, high efficiency, fierce competition, fast product update iteration and short life cycle. The cultural atmosphere dominated by compliance culture (or rigorous culture) formed by commercial banks for a long time is quite different from this feature, which restricts their innovation in the field of Internet finance. Under the guidance of compliance culture, all businesses emphasize standardization first, so many restrictive links and monitoring measures are designed, such as business authorization, post supervision and system control. This makes it difficult for commercial banks to respond quickly to customers' needs when they carry out innovations with long process and many constraints. Internet companies are dominated by innovative culture. Once they find market opportunities, the first thing to consider is how to seize the market through innovation, and set up a high risk tolerance and quick payment mechanism for this. In the case of controllable risks, speed comes first. Therefore, the innovation cycle is short and the product launch speed is fast.

Problem 3: The traditional operation mode restricts the effectiveness of innovation. The business operation mode of commercial banks is designed based on capital flow, which circulates itself in the banking system, and does not directly interfere with customers' trading behavior, but more passively meets customers' needs. The internet financial products developed on this basis are basically the same as the accounts, information, risk control system, business approval processing system and accounting system that customers rely on to handle business in the physical channels of banks, and have not fundamentally changed the traditional operation mode. This leads to a certain gap between the innovative products of banks with the help of the Internet and the needs of customers. Internet companies expand their financial business from the customer's business behavior and trading behavior, and design their operation mode based on this, which is closer to the market and customers. More importantly, Internet companies can tap customers' potential consumption or investment needs from trading behaviors, and develop financial products accordingly, so as to achieve higher innovation results.

Question 4: Risk control affects the customer experience. The characteristics of highly leveraged operation and strict financial supervision make commercial banks usually put risk in the first place in their daily operations, and risk culture plays a leading role in corporate culture. In addition, in the case of imperfect domestic laws on financial consumers' rights and interests and excessive protection of residents' rights and interests, commercial banks have taken many risk control measures not only from their own perspective, but also from their customers' perspective, based on the consideration of preventing reputation risks and avoiding the spread of customer losses to banks. For example, in online banking, in order to protect customers' assets, banks usually require customers to use U-key, and at the same time, they need to enter a password for verification, which leads to complicated processes and affects customer experience. In sharp contrast, the online payment launched by Internet companies can be completed by simple password verification, and the balance wealth management products can also be purchased online by binding the bank card number, which is very convenient for subsequent purchase and redemption. The Internet is characterized by convenience and quickness. Financial products developed based on Internet technology should adhere to this feature. If we still use traditional thinking and excessive prevention and control measures, it will not only affect the customer experience, but also violate the spirit of the Internet.

Question 5: Lack of platform makes it difficult to cut in quickly. Market demand is the direct driving force and vitality of innovation. The same is true of Internet financial innovation. The reason why Internet companies develop financial business rapidly is that after years of accumulation, these companies have generally built an online business ecosystem composed of many businesses and consumers, with rich application scenarios. Although commercial banks have huge customer groups and customer information, they are mainly offline customers, lacking Internet application scenarios and network economic platforms. Therefore, the development of Internet financial products represented by online direct banking is not optimistic. More importantly, one of the advantages of internet finance is precision innovation and precision marketing, that is, aiming at different types of customers on the platform, based on the characteristics of trading behavior, developing targeted products and guiding them to the corresponding application scenarios. It can be said that the lack of platform is a shortcoming for commercial banks to carry out Internet finance. This is also the reason why commercial banks launch online shopping malls.

Question 6: The marketing method and intensity can't compare with Internet companies. The wide application of Internet and big data not only accelerates the speed of financial innovation, but also changes the behavior of customers. On the one hand, due to the rapid update of new products, more choices and more frequent customer flow, the loyalty to a single financial institution has declined rapidly; On the other hand, Internet technology has greatly reduced the switching cost of customers between different financial institutions, and the price sensitivity of customers has increased simultaneously. The viscosity of customers depends more on the popularity and price level of products. Therefore, marketing promotion is extremely important for the development of Internet finance. Because of this, Internet companies often spend a lot of money, even at the expense of raising their popularity and acquiring customers, such as bill financing products that sold well in the early stage. However, commercial banks are restricted by supervision and their own traditional concepts, and their marketing efforts are far less than those of internet companies, and their marketing methods are more traditional, which makes it difficult to adapt to the new trend of the internet era. This has greatly affected the brand awareness of commercial banks' Internet financial products and restricted the subsequent innovation.

Five Countermeasures and Suggestions on Strengthening Internet Finance Innovation in Banking Industry

First, improve supervision and establish a regulatory framework for Internet finance based on functional supervision. The relaxed regulatory environment not only promotes the rapid development of Internet finance, but also brings certain risks. In particular, the zero threshold in the unregulated state makes the institutions engaged in Internet finance mixed, and some institutions blindly expand their business, exceeding their own risk management and control capabilities, leading to risk accumulation, and even committing fraud in the name of Internet finance, which has an impact on financial security. More importantly, this unfair regulatory environment restricts commercial banks from participating more in Internet financial innovation, which is not conducive to the stable development of the whole industry. Therefore, establishing a regulatory framework based on functional supervision is the basis for the sustainable development of Internet finance. First, Internet enterprises engaged in financial business should be brought into the regulatory system as soon as possible, and the regulatory authority should be divided according to the principle of functional supervision, so as to ensure that institutions engaged in the same business accept the same regulatory requirements and effectively regulate the access and business development of Internet finance. Second, take the Internet financial supervision as an opportunity to conform to the general trend of integrated operation and cross-border operation, form an effective linkage between banking, securities and insurance supervision as soon as possible, and explore a unified financial supervision model similar to that of the British Financial Services Authority. The third is to encourage commercial banks and other traditional financial institutions to carry out financial innovation with the help of internet technology, and try first in some commercial banks with strong risk control ability and high information technology level to create a level playing field.

Second, introduce new technologies and implement the information banking strategy. Commercial banks should change the concept of information technology, make information technology change from business-oriented to management and heavy-duty, and change from science and technology support to science and technology leading, and comprehensively promote the implementation of information banking strategy. The core is to maximize business operation efficiency, scientific decision-making level and customer experience through the in-depth application of technologies such as Internet, mobile communication, big data and cloud computing. Specifically, in operation, it is necessary to break the traditional bank's business model based on self-circulation of funds in the body, actively extend the service chain, and deeply integrate financial services with customers' trading behaviors (including consumption, production, investment, etc.). ), and use information technology to integrate upstream and downstream transactions, build a trading platform, and establish a corresponding financial service platform; In addition, by establishing an online mall and cooperating with platform enterprises, we will build an online business ecosystem, accumulate transaction data, tap customers' financial needs, improve risk management capabilities, and achieve online customer acquisition and online operation. In management, it is necessary to speed up the integration of data resources in the internal trading system, introduce big data technology, deeply analyze customer behavior characteristics and market trends, and realize refined management and precise marketing based on customer classification. At the same time, actively build an integrated and unified management information platform, unify management index rules, form a report system for managers at different levels, and improve the data support level of management decisions.

Third, integrate resources and build four basic platforms. Platform economy is the foundation for the rapid development of Internet finance. Therefore, the direction for commercial banks to develop internet finance is to integrate internal and external resources around the core of "finance" and form an online comprehensive financial service platform based on customer platform and supported by service platform, product platform and function platform. In terms of customer platform, we should either build an online mall, cooperate with e-commerce, cooperate with leading enterprises with huge customer resources such as logistics and telecommunications, or integrate the upstream and downstream of the industrial chain to realize the effective integration of customer resources and build many customer platforms with different characteristics to achieve rapid customer acquisition. In terms of service platform, different service channels such as outlets, self-service machines, online banking, account managers and customer service centers have been opened, which has formed the advantages of combining online and offline service channels that are different from Internet enterprises. In terms of product platform, we should not only make offline products online, but also devote ourselves to developing targeted online financial products. More importantly, many products should be integrated according to their functions to form a one-stop and all-round comprehensive product platform. In terms of functional platform, around the customer's business behavior and transaction behavior, the upstream and downstream business scenarios are integrated through Internet technology to create a comprehensive functional platform integrating production, life, consumption and investment, and realize the effective connection between customers and financial services and products.

Fourth, leverage development and build diversified cooperation channels. Compared with traditional finance, the advantage of internet finance lies in the deep integration of finance and customer behavior through cross-border integration. This requires the establishment of a relatively complete Internet business and financial ecosystem. In this regard, although commercial banks have rich financial experience, they need to realize online conversion; Although it has accumulated a huge customer base, it lacks the application scenario of transferring it to online, and it has not achieved the integration of clustering and platform. Therefore, commercial banks need to cooperate with various institutions to create an ecological environment suitable for Internet finance business. On the one hand, actively cooperate with third-party payment and e-commerce companies to develop targeted financial products and promote their applications through their platforms; On the other hand, explore cooperation with telecom operators and mobile phone manufacturers to bundle their financial products with mobile phones or services to realize marketing forward; Third, cooperate with physical merchants, integrate financial services based on the offline business environment of physical merchants, build online and offline application scenarios, achieve batch customer acquisition, and form a replicable and scalable cooperation model; Finally, strengthen cooperation with various financial institutions, develop characteristic financial products suitable for Internet applications, and form product advantages.

Fifth, explore system reform and implement professional management. Breaking the shackles of traditional institutional mechanisms and establishing a professional management system that is compatible with the spirit of the Internet is the key for commercial banks to develop Internet finance. Therefore, commercial banks can explore the establishment of specialized Internet finance companies or business divisions, realize Internet operation within the companies, establish compensation incentives, talent introduction and product innovation mechanisms consistent with Internet companies, and solve the problem of low marketization of traditional mechanisms within the banking system. More importantly, Internet finance companies or business divisions implement a relatively independent technology development mechanism to prevent the development needs of traditional banking business from crowding out technology resources and improve the efficiency of technology development. At the same time, a special customer experience team is established to help product developers fully understand customer needs, improve product functions, and realize customer-centric from the product design stage. In addition, in view of the characteristics of Internet financial products, such as rapid innovation, many potential risks or loopholes, and high frequency of subsequent improvement, a quick compensation and risk tolerance mechanism was established to set risk tolerance for new products. Once customers use new products for reasons other than their own, they will be compensated quickly and effectively improve the customer experience. Through the system reform, we will re-establish the operation mode and mechanism different from the traditional practices of commercial banks, improve the degree of marketization, and make up for the gap with Internet enterprises.