Firms bank on secure transactions
By Zhang Ran (China Daily)Updated: 2007-03-27 08:56
"Local banks will only be able to increase their competitiveness if they build up a centralized database and an open service system for more efficient and normative management," Guo said.
Since China fulfilled its commitment to the World Trade Organization in opening up the banking sector at the end of last year, every aspect of competition between local and foreign banks has intensified including building IT systems.
As foreign banks launched a recruitment war to find local talents when the country's renminbi retail business opened at the end of 2006, local banks initiated their own battle improving their IT systems to take on the sophisticated services of their overseas counterparts.
Local IT research company CCW Research said that in 2006, the total amount Chinese financial institutions put into IT system building reached 30.3 billion yuan, an increase of 10 percent on the previous year and the highest rise in the past few years.
It estimated the total input of financial institutions in IT system building in 2007 would exceed 10 percent, given the increased competition.
"Chinese banks were busy restructuring themselves for initial public offerings in the past few years. And they made strategic moves such as writing off non-performing loans and increasing capital adequacy ratios. So the IT system building projects were postponed," Khoo said.
Now that major Chinese banks have listed on the stock market they are building up well-functioning databases and other IT infrastructure.
For example, one of the Big Four Chinese banks, China Construction Bank, invests around 20 to 30 percent in IT system building each year. It's currently running 80 IT system projects.
"There are three steps for Chinese banks: First, to realize business growth; second, to guarantee regulatory compliance; and third, to reduce costs and modernize management," Khoo said.
"Service excellence and relationships are what will differentiate winners from losers, because the majority of customers think banking has become homogenous," he said.
(China Daily 03/27/2007 page15)
 | 1 | 2 |
(For more biz stories, please visit Industry Updates)