Commercial challenges facing banks in the Internet era Author: Ma Weihua, governor spoke just Xiaoling has been very systematically and comprehensively, I will talk about the experience of it. Just on the definition of Internet banking, and I agree that we define the governor Wu, in fact, is the capital of financial intermediation, this Internet-based financial intermediation. Now more broad concept, one is traditional commercial bank to our traditional business over the Internet to do, this started early, the traditional business moved to using the Internet to do, called cement and mouse.
The second category is the Internet company to do financial business, doing business intermediation of funds, including settlement. The third category of past vision, is that pure Internet banking. I think now we are more talking about the concept of relatively narrow sense, the Internet company to do financial business, and now more and more as the bank is talking about this thing. In fact, dealing with banks and IT is very old, because the bank has two functions, one is the financing of the agency, for example, put money to me, I loaned out, called factoring intermediary, the second is payment platform All commodity trading by banks to complete the settlement of the funds, whether it is an intermediary financing or settlement platform, we have all need to rent IT systems. IT companies actually want to do finance, far from today onwards, when Bill Gates in the eighties, he said I rented commercial reference system, I do not like yourself, that when you get an intuitive software company, wanted do this thing, or the eighties, this child was the US banking sector, was quite nervous, the organization lobbied the Federal Reserve Banks' Association, the regulatory authorities did not grant him the last, so that there is a saying that when Bill Gates Bill Gates said that if you these traditional banks do not change, you are the twenty-first century is about to extinct dinosaurs, when in fact I Merchants Bank governor is listening to Bill Gates, I still have a lot of pressure . So because of pressure at that time I began to do banking over the Internet, so we were a small bank. At that time 100 billion in assets. But we have an advantage is that the Internet is the uniform, when a big bank or a line of models, so we can deposit and withdrawal. At that time seems to have 72 hours to engage in a survival experiment, put a person in the room, 72 is to give you a card, the Internet gives you a number, do not give you anything to eat, you can see live how long. The final victory of the people, seems to be called the devil, he is China Merchants Bank net Commercial Bank, called the coffee, milk alive, 72 hours, so that the twelve night for us to do a promotion. At that time we have no other advantages in online job under a lot of work in this area at that time because of the deposit and withdrawal, deposit and withdrawal so we have a debit card, because it was able to deposit and withdrawal, so the design of China's first a more complete network operators banks can engage in online payment, online securities, online store when we have, 15 years ago, online billing and so on. Merchants Bank's lead now online replacement rate of 95%. CMB because fewer than 1000 outlets, but a large volume of business online, and Internet traffic are basically young people. So three people Merchants Bank retail customers, one is young, the second is the rich, and the third is the urban white-collar, because he wanted no empty line banking, online bank instead.
But today, to today, and now the Internet bank finance is not competitive with their industry, and that you who use the Internet cement and mouse do well, is competition from different industries, so Ma always said to me, he said, Ma Brother you can not do this, I can do it. Pony horse challenge. Currently Xiaoling have talked about, the first one is to pay a third party, as I said, the bank's two functions in the payment field is developing very fast, third-party payment is now approved a 250 almost, the growth of their license more than 200 are still approved, they grow almost 100% a year, now more than 2 trillion, 4 trillion soon, when it comes to more than ten trillion in 2016, this volume is very large, but they just as Xiao Ling say, has its inevitability, it is a lot of small frequent, occurring on very fast this Taobao, these banks did not tell the truth to facilitate the people, I say it should be, Ma you The thing to do is right, you do not look diversion of my business, I say you still my burden. The second is also an Internet-based mobile payment services, mobile payment development is also very fast, because mobile payment, mobile payment is now China's 450 million mobile phones, and last year's trading volume was 150 billion, probably in 2013 on more than one trillion, explosive growth. We are engaged in two mobile payment last year, is a collaboration with the operator, with the SIM card, and the second is cooperation with handset manufacturers, but this is only to solve the near-field payments, in the future our goal is to replace credit cards for remote payment This is not very far away things. There is a net borrowing, just Xiaoling also spoke, net lending crisis in 2007 from Shanghai landed, now and 2012 our P2P network platform has more than 300, in China, the total amount of the loan is about more than 60 billion Now the amount is not great. But this child it was a prairie fire, is developing very fast. I said yesterday in Davos, a foreigner in France, he also engaged in Chinese P2P online payment, he said it was exciting, it can make money, is this child, general financial roots can do, and so that this will certainly have a very big market. However, these banks can do, for example, the bank's net loan. The fourth is to raise public investment, one is all loans, this is purely Internet banking, raise public investment to run off a public financing of such a revolution, but it seems to have been a lot of restrictions in China, the development in the United States faster, especially pre-consumption has become a new trend when all the chips investment spending is not just come up with a project to attract investment, for music, games, start-ups, application, fashion design, including you design a creative film, can be fund-raising. Like recently had an animated, half the 1.58 million it raised, so that to find a lot of creative enterprises. But this thing in China there is a limit illegal fund-raising, I would figure out how to do this thing in the future, so China is also subject to many restrictions.
Another one just mentioned banking, banks are good in the past, but now the balance of treasure has been published, just mentioned, through Internet sales of fund products, this will be able to finance large now become a fragmented financial, at least 10 dollars, I think this may be the future for the majority of people, there may be some impact, like fragments of finance, because the balance of treasure only a few days to 20 billion, and now there are a lot cosplay xxxholic of treasure balances continue to apply such a product, Since you let go, it is not an a. So I think now do banking through the network, which is relatively fast development aspects. Then these areas, it is sufficient to remind commercial banks should not be underestimated, and a commercial bank facing financial intermediary weakening problem. Because commercial banks in the past he also information flow, capital flow of concentration. Commercial banks have access to information, Internet companies are now far so broad, so fast, and the openness of the Internet companies decided he was more sensitive than the commercial banks integrated information, which is the advantage of the Internet. That day I was in Davos, arranged for me and female CEO Facebook's Sandberg, having a conversation with him, I want him to one of our commercial banks are now considering what the result of this that we have to talk to host men and women leadership The difference, so I talk to her this has gone, I have always been against the mark do Facebook I still consider as many as you like Facebook has 1 billion real-name customers, which 1 billion there certainly supply of funds, funds demand, now With the first search engine, supply and demand can be ordered up, and then there is the cloud, there are credit system, then it can fund the needs of each person, make an assessment of a risk-based pricing, coupled with the hands of everyone a mobile terminal, this thing is completed, and if they themselves are free to love, and that the bank is useless. Now yet reach, Xiaoling me about your point of view, is still difficult to shake the status of banks. But now there is a saying that the Internet will become the bank's financial Terminator, this is terrible, I have just one Xiaoling wrote a little bit about my heart. Banks now are not necessarily immediately end, which is weakening the role of an intermediary. Second, commercial banks face the traditional service model, faced with this reform, we are now all these years, customer-centric, we still accept this idea, also remember that China Merchants Bank has a change because of you, creating a Chinese banking product centric to customer-centric historical transformation, the evaluation of the CMB is still very high. Actually guys are also doing so. Because you do is service bank, you do not understand your customers' needs, how people can run with How about you? You open the hotel do not know your customers eat salty, that people can come? So banks are customer-centric. But Internet companies has his own style, he is characterized by respect for the customer experience, and emphasizes interactive marketing, coupled with the platform open, and more emphasis on the mode of operation of the combination of Internet technology and financial core technology. I think this is a traditional bank also can not do now, especially a lot of these small and micro clients. Also banks are now willing to do small and micro enterprises, this I do not mean false, because it is not a light response to the call of thing, because there is a provision of the Basel Committee, he put the whole weight of the risk of large enterprises as 100%, SMEs 75% think this thing might Assembly child how can such a definition?
The Basel Committee believes that large enterprises low probability of default, loss given default rate but, that he was out of the question, are connected with the economic cycle. Therefore, the loss rate is difficult to avoid, small and micro businesses, small businesses risk weight is 75%, is to do his business save 25% of the capital. Why does he think so? He is a high probability of default, loss given default rate, which is a very simple truth, large numbers theory, more good people than bad people. We do a credit card is, you do not see the credit card is no guarantee mortgages, more good than bad guys. So now the bank then this additional capital more difficult? Therefore, all banks are savings capital, in order to conserve capital, want to get high rate of return, it is only a small micro-enterprise most accounts, but do not mean that small businesses do it, the risk you take every business are get, all clear, due diligence, you do not do it a loss, this hundred and eighty million, and you go to the two survey day, that can do it? It must find a way, this way, in fact, the Internet business is the most advantageous. For instance, Ma do this, Paypal, Alipay accumulated Taobao customers, a lot of information, which he is very valuable, and small Ali credit by virtue of the information day trial 8000 pen, you think, an hour how many pens He alone, the information, he would be reduced, he the defect rate is not very high, you do the small and micro enterprises, must batch, professional, industrial land, the risks identified several indicators, Wells Fargo United States The original tenth largest bank loans 100,000 dollars to do so, to do today to achieve the largest US bank, is now the fourth largest original first big profit. So this is a challenge for Internet companies traditional bank. The third is the impact of income sources, you think the bank two business, a credit interest income, the second is the fee paid, the two have "fairy tale cosplay " been disintermediation, then you certainly want to reduce bank earnings, the original bank may sell the fund, sales of financial products, the bank has a huge channel advantages, and now the Internet can also be sold, it will almost certainly be part of the diversion to go, so there is no doubt that the Bank of this income is subject to a number of diversion and reduction. So this is what we are seeing challenges banks.
The challenge is often to make us think about the future, the future, if there is money, then it certainly will not be the end of the bank. Even money does not exist on the future, and I think banks do not know how children, and now it is an open question. But I think the revolution the Internet or any one of science and technology, at the same time you need something to challenge, he will certainly make a deal with the challenges, solve this demand approach, which is what I just said Bill Gates 15 years ago I say the words, but the bank did not become a dinosaur, the bank or in the good to be alive. Internet financial development, although commercial banks pose a serious challenge, but I think there are a lot of historic opportunity. First, the Internet has given you a raise, it can be personalized to customer service, allowing customers to experience better, which also allows you to complete the commercial banks for our use, we can also use the network transmission, the use of cloud computing, the use of vast amounts of data for analysis, I have to read before I went to visit the Tian cloud, big data analysis of customer behavior now is very meaningful, you can analyze your customers during this period, what kind of what kind of customer needs products, the need which level of product, you can complete and accurate precision marketing, can be used on commercial banks. Pricing, especially risk-based pricing, you can use big data technology, as I said, he that Ma Alipay accumulated data, of course, are a large number of small businesses data bank for so many years and has accumulated a lot of this medium-sized enterprise data, which is very valuable, is how these data further digging, you can give and medium-sized enterprises, but also can provide customized services. In addition, I think that will also help tap new value of the bank. Although cyberspace developed rapidly, the network allows us to draw closer in the virtual space, but you can not shorten the distance between the reality of physical space. cosplay costumes for sale Network can provide vast amounts of data, but not able to solve the real problem of trust between people. Now in the Internet age, and effective information channels humane and realistic confidence, I think this is necessary, and in this regard, the bank due to historical reasons, due to the characteristics of his business, he still has a very big advantage of . I think that with these advantages, the bank can put their trust in the media, the role of the media pay channel media further play.
I think the network bank in a sense, and traditional banks, the demand for the whole society are complementary, the network should be to a certain extent in the real world, I think the network is more developed, especially in the third-party payment developed, boosting the bank's payment equivalent to the functions of the media, from the real world extends to the corners of cyberspace. Banks can not do in the past. From another point of view, for the present, these third-party payments business development faster, the more their money, I think the banks should be more happy, because they ultimately bank's customers, they have to put money in the bank, so Under the present circumstances, our traditional banking and Internet banking, is completely complementary, do not see it as a confrontation, in fact, the power to pressure the bank's Internet banking is banking innovation. Xiao Ling just mentioned in the case of the Internet, this is the only way banks innovation. I think we as a commercial bank, but also to adapt to this era, there is now a fashionable word what is called wisdom, which is IBM [microblogging] invention, I want the bank to build a banking wisdom, it is entirely with the big views data customers to do market analysis, marketing, capital measurement do banks, price management, which is entirely possible.
Banks can further save costs, can further prevent risks. In addition, I want to further the network of banks, and now the bank network is the Internet's biggest feature is the interconnection, even the more widely as possible, so that banks do not put their own closed systems, if control of risk in the case of banks, between banks, between banks and more cross-industry interoperability, I think we can be greater complementary advantages. I want to face the competition of the Internet, the challenge as a traditional commercial bank is definitely yes, in the past you eat food alone, but now people have a share of the points, but also points a bowl of rice, but also points more things, you want to know this reality. As a commercial bank you want a little more of the Internet genes, so I think we together meet this era, the commercial banks will not end.