Future Bank vision: Vanishing Outlets

Internet finance and financial Internet, these two concepts originated from Ma Yun, June 21, 2013, he published in the media, said: "The future of finance there are two major opportunities, one is the financial Internet, the financial industry to the Internet; the second is internet finance, the pure layman's leadership, in fact, many industry innovation is a layman came in to trigger." The financial sector also needs spoilers, and more need for those who are laymen to come in and change. ”

The internet is rapidly changing the traditional business model and organization, with its technical advantages and huge customer data, began to infiltrate the financial sector: first is to pay, followed by loans and financial, and finally deposits, some internet companies have entered the supply chain finance, factoring and other business areas.

The competing relationship between Internet enterprises and banks

At present, any commercial bank cannot turn a blind eye to the challenge of internet finance, consider it unimportant, but at the same time, the majority of banks will not think that banks in front of the Internet companies will not act, should objectively, rationally and dialectically look at the advantages and disadvantages of internet enterprises and banks and competing relations.

What are the advantages of Internet companies?

The most important advantage of internet companies is that they do not have the regulatory restrictions of traditional banks, it can play a game without rules, the technology of Internet enterprises and grassroots attributes, and make it innovative power and ability. At the same time, internet companies pay more attention to customer experience, and even experience higher than security. Another point is that internet companies have no historical burden, it can give all the income from financial services to customers, and even to subsidize other income to customers, and banks as a vested interest in the traditional financial industry, long-term reliance on spreads and service income, and carry "profiteering" moral criticism.

The disadvantages of internet companies are also obvious. Without financial licences, unregulated, and therefore unprotected, the assets of financial institutions need to be docked, while the security of technology and capital is relatively low. In addition, the liquidity management, so far, internet finance has not experienced a real test.

The advantages and disadvantages of banks are just upside down compared with internet companies. Banks have legal financial licences, are protected by law, have strict risk management, are particularly good at liquidity management, focus on security and reputation, and have a large number of customer trust. At the same time, the traditional banks also have a very complete product line, especially the asset business, such as "babies" ultimately have to rely on investment banking agreement to gain money.

The advantage of Internet enterprises is precisely the disadvantage of banks: subject to strict regulatory restrictions, lack of innovation, the response to the market is relatively slow, inflexible, not enough attention to customer experience, as well as historical burdens and vested interest in the bank's bondage.

Since 2013, "Internet Finance + Private Bank" has provided the market and the investor infinite imagination space. However, individuals do not agree that Internet finance is a subversion of traditional finance. The future is not for Internet companies to become financial institutions (certainly not to rule out a part of the future as financial institutions) but to turn financial institutions into internet companies.

The internet has the power of great change, and it is revolutionary in particular in driving bank sales and service channels and in changing the way banks and customers interact. Internet technology off the media and to mediate the function, the overall reduction of transaction costs, flat management also contribute to the promotion of efficiency.

Calm thinking, as one scholar said, the Internet in the channel to challenge the traditional banking and capital markets, but in the product structure and product design with the banking, insurance, capital markets and other products operated by the no difference. The essence of finance has not changed, or the exchange of trans-period value of the parties to the transaction is the exchange of credit. The essence of financial products is a kind of trans-period exchange between definite cash flow and uncertain cash flow, this has not changed because of the advent of the Internet, and there has been no change in the principles of liquidity, profitability and security for financial institutions, and the benefits of all financial products require the support of underlying underlying assets This has not changed anything.

Therefore, financial institutions and Internet enterprises is not a life-and-death relationship, more is a competing relationship, there is competition, there is mutual infiltration and reverse osmosis, but there is room for cooperation.

Divided by Business dimension: Bank liabilities, assets, the middle three business, internet companies are better at paying services and absorbing debt, and in the wholesale and retail dimensions, the advantage of Internet companies is the retail market.

Internet finance, represented by balance treasure, can better help banks to do their debt-side business, while banks can focus on asset-side business. The core competitiveness of the bank lies in the risk management, which embodies the asset side and the risk asset pricing level. The balance treasure will not lose the bank's life, but will help the banks do what they really should do. At the same time, the wholesale field needs a huge amount of money, more need a security and credibility, so the business-to-business domain is still the dominant area of traditional banks.

Can the future of Internet enterprises into the traditional financial institutions of the front-end, sales channels, so that it to diversion, to complete the accumulation of social idle funds, and banks in the back-end concentrate on the asset business, especially large assets business, large and medium-sized corporate finance? This is a worthwhile direction to explore.

Three models of banks coping with internet finance

At present, commercial banks face great changes in external operating environment, capital supervision, financial media, interest rate marketization and Internet technology Progress, these four trends represent the huge threat and challenge to the banking industry at present, these trends all point to one: banks must take the Internet development path of light capital.

The change of business model and financial model in Internet age is irreversible. There are three models of banks responding to Internet challenges: first, the internet sales of financial products, that is, the development path of electronic banks: from electronic banks to the current direct-selling banks, and then to the future banks, the second is the bank's own electricity business, but also Shang, the third is the social electric business model, that is, banks and internet enterprises, Especially the cooperation mode of the electric business enterprise.

The so-called electronic banking road, from the first generation of information to the Internet, to the second generation of products online, to now the third generation of services online, the bank has gone through more than more than 10 years of development process. Now many banks have introduced a third-generation characteristics of the network of silver, such as China Merchants Bank's "I", Citic Bank's financial mall, Everbright Bank's Sunshine Business hall and so on.

The third generation NET Bank is very concerned about the customer behavior, the transaction record and so on big data analysis, then carries on the accurate directional marketing. At the same time, the bank will account manager, financial manager also configured to the Internet, the former customer is one-way, self-service internet processing business, now can be two-way, pre-sales marketing consulting, sales business management, after-sales service complaints can be centralized on the internet to achieve.

There is also a direction is the line of online silver and offline network, the bank can even with other industries of the chain of channels, this model is O2O mode, also known as the Community banking model. Community banks should be through the tentacles of community outlets, to promote offline customers into online customers, but at present, the Community bank as a extension to the community of light outlets, is not located in the O2O mode of the offline promotion.

The second mode is that the bank runs its own business, making its own business-to-business E-commerce platform, providing online trading services to customers and extending to payment and financing services. For example, the construction Bank of the good and Financial mall, the Bank of the exchange, ICBC's Rong e purchase.

Should banks not run their own electricity business? There's a lot of controversy. Opponents believe that banks do not conform to the principle of social division of labor, banks do not have the Internet gene, it is difficult to do, and the "Commercial Bank law" does not support commercial banks to invest in entity institutions.

At present, the banking department has not found a suitable profit model. All the models are trying, whether it is the sector model (CCB) or the bank shareholder model (CMBC), or the possibility that the bank will set up a holding subsidiary model in the future.

In the third model, banks provide financial services to social power providers, that is, banks, as professional financial services providers, and many of the social power providers to carry out extensive cooperation to provide them with financial services. Commercial banks are both the support of E-commerce environment and the final performer of payment and settlement. The whole E-commerce business flow, information flow, capital flow, logistics, "four flows in one", the Bank is the ultimate realization of the closed loop indispensable, the bank mainly play four aspects of the role of credit intermediary, payment intermediary, funds intermediary, information intermediary.

Future Bank vision: Vanishing Outlets

At present, micro-letter payment, balance treasure, drop a taxi, Ali acquisition of Gold, Tencent acquisition of public comments, Citic and Ali Tencent cooperation network credit card ... Behind this series of confusing phenomena is actually to fight for the entrance.

On the Internet, users have a variety of activities, news, video, search, gaming, shopping, social networking, maps, investments, payments, and so on, each user's needs can lead to a huge user flow of hundreds of millions of people, and as long as the application has enough user stickiness, you can go down it to expand other applications. This is the internet age "The entrance is king" Law!

However, compared to search, social, shopping and other applications, finance is secondary demand, always in the user to meet other needs in the process of the associated needs, it is difficult to have customer stickiness, so in the internet era, as a blue blood nobility of the financial institutions will be humble to go and grassroots-born Internet enterprises.

If banks bind their portals to the mainstream of the internet, they can significantly increase customer traffic. Another idea: If banks can make a mainstream portal like search for social browsers, wouldn't they be begging? The Bank of electricity is an exploration, but other explorations have not been seen.

The Bank's products and services are bound to be open, sharing, innovation, individuality, the characteristics of the Internet spirit of development, the Internet to play a low-cost, efficient, open, borderless, equal benefits of the advantages of full use of the spirit of the Internet, philosophy and technology, the Internet as a major marketing and customer service channels. In the specific business model will emerge more from the financial, micro-finance, grassroots finance, Pu-hui Financial and other innovative business models.

In the future, the ultimate goal of banking network transformation is to eliminate outlets. In Australia, for example, the number of banks in 2012 was reduced from 6,631 to 6,501 and 130 were closed, and the 2013.5 Annual report by Bank of communications reduced its outlets from 2,691 to 2,681. Perhaps in the near future, the phenomenon of the bank more than the rice shop will be fundamentally changed, customer and bank interaction will be mainly in the cloud!