Banking executives at the World Economic Forum in Tianjin, China suggested that Chinese banks needs to focus more on mobile banking as they shift towards consumption-based lending.
The Chinese banking industry has been heavily reliant on their VIP or high net worth clients. With technology like internet services improving mobile banking in China banks will have a new market apart from their usual VIP clients.
Guangfa Bank has started to explore new technologies and innovations and moving to what they call “smart service” mobile payment options therefore reducing the need to build physical branches since most of the services can be offered online.
The focus shift is primarily due to the fact that profit growths have weakened tremendously and loan demands are decreasing because of the economy starting to slow down. This slow down gives Chinese banks to rethink their strategies and come up with solutions that include lending to retail and small to medium businesses with a primary focus on mobile banking.
- Mobile banking is estimated to become a $1 trillion industry
- 69% of consumers in Asia are willing to use mobile for banking transactions
Ma Weihua, Chief Executive Officer of China Merchants Bank Co: “I.T. is like oxygen, air to the banks.”
Morris Li Ming Shieh, President of China Guangfa Bank: “Banks here can leapfrog (the stage of building) physical infrastructure.”
Jaspal Bindra, chief executive officer for Asia at Standard Chartered Bank: “Mobile banking is estimated to cross one trillion U.S. dollars… Facebook already earns $500 million just on payments every year. 69% of consumers in Asia are willing to go mobile for commerce.”
Do you think that this situation is also applicable to the rest of the world where banks have to shift their focus from high net worth clients to retail and small to medium enterprises? And in doing so, will mobile or online banking make it easier for these small businesses to use banking services such as lending?
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