Strategic restructuring, customer experience and smart technology are key drivers for China banks' success, KPMG and Alibaba Cloud joint White Paper says
HONG KONG,Aug. 9,2019 --To establish leading banks of the future in China,the banking industry must undergo key transformations in terms of strategic restructuring,customer experience and smart technology,according to an inaugural KPMG and Alibaba Cloud joint white paper,titled "Future Bank: A new starting point of the data technology (DT) era of China's banking industry development".
The report analyzes the development of China's banking industry and identifies future banking trends. The paper highlights four main challenges under the current big data-driven era: changes in social structure,rapid development of technology in the future,established innovations and reforms,and rising costs.
Changes in the social structure have led to fundamental changes in customer demand and operational challenges for the banking industry. The white paper highlights that the industry needs to shift away from its traditional operating concepts and product service models. Technology is advancing at a rapid pace,impacting the banking industry at the same time. With more new technologies expected to be launched and applied to the financial sector over the next three to five years,the paper urges banks to re-examine their positioning of technology and seize the changes brought about by the rapid technological advancements expected to impact the banking industry.
China's banking industry has undergone many years of reform.Rising costs of compliance,system maintenance and human resources,as well as the pressure on costs brought on by stringent credit extension in risk control and cybersecurity threats-- on top of increased competition in the industry-- bring additional challenges to the traditional model of sustainable profitability,according to the paper.
With the challenges that the industry is facing,the white paper states that future banks need the following three key transformations: firstly,restructuring both in terms of form and strategy is needed to create a more professionalized governance structure that is better aligned with the banking ecosystem,presenting to the public a brand-new image while performing a strategic restructuring from top to bottom. Secondly,KYC and customer interaction are essential as future banks will reclassify client into smaller and more targeted segments to achieve more in-depth understanding of clients' needs; customer experience should be considered a cornerstone in the reshaping of the value chain. Lastly,future banks must view "smart technology" as an asset value,use smart technology to convert data into a value proposition that supports the achievement of higher precision in banking operations.
Honson To,Chairman of KPMG China and Asia Pacific,said: "Through our insights on the global market,we see a rising trend of sustainable development among new business models,including digital banking and open banking. It is noteworthy just how much technological development is booming in the modern era,with technology including cloud computing,artificial intelligence,blockchain,big data,and wireless Internet-- becoming widely used in the commercial field. We are optimistic that the development and application of technology will bring about crucial impacts to the development of banks in the future."
For more information on the white paper,please visit KPMG's website.
About KPMG China
KPMG member firms and its affiliates operating in mainland China,Hong Kong and Macau are collectively referred to as "KPMG China". KPMG China is based in 22 offices across 20 cities with around 12,000 partners and staff in Beijing,Changsha,Chengdu,Chongqing,Foshan,Fuzhou,Guangzhou,Haikou,Hangzhou,Nanjing,Qingdao,Shanghai,Shenyang,Shenzhen,Tianjin,Wuhan,Xiamen,Xi'an,Hong Kong SAR and Macau SAR. Working collaboratively across all these offices,KPMG China can deploy experienced professionals efficiently,wherever our client is located.
KPMG is a global network of professional services firms providing Audit,Tax and Advisory services. We operate in 153 countries and territories and have 207,000 people working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"),a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such. In 1992,KPMG became the first international accounting network to be granted a joint venture licence in mainland China. KPMG was also the first among the Big Four in mainland China to convert from a joint venture to a special general partnership,as of 1 August 2012. Additionally,the Hong Kong firm can trace its origins to 1945. This early commitment to this market,together with an unwavering focus on quality,has been the foundation for accumulated industry experience,and is reflected in KPMG's appointment for multi-disciplinary services (including audit,tax and advisory) by some of China's most prestigious companies.
