A customer of Heilongjiang Rural Credit Cooperative can travel around China with a card (deposit book) of the bank;
A customer living in a remote town of Qinghai can also buy wealth management products;
After accessing the modern payment system, Jiangsu Mengyin Rural Bank can enjoy convenient and express settlement channel…
It is the inclusive finance dream of Industrial Bank (IB) to let the cities of the third and fourth tiers and rural areas enjoy modern financial services. It is increasingly close to the dream with the help of “bank-bank platform”.
The Fission from 1 to 25600
The number of outlets connected by the counter pass of the bank-bank platform reached 25,600, and with these nodes, customers can access banks across China, going toward a broad financial world from an isolated island.
Yet, this has its origin in a simple cooperation concept.
Back then, IB, as one of the first group of joint-stock commercial banks, further accelerated the arrangement of its national service network after its name alteration and a new round of investment attraction. However, the bank discovered that it was not practical to establish an outlet pattern, with its own strength, which could compete with large state-owned banks. Meanwhile, IB discovered that medium- and small-sized banks (urban commercial banks, rural commercial banks, and rural credit cooperatives) had considerable business outlets in their own business areas, but they could hardly meet the non-local service demands of customers as a result of lacking non-local network support.
General Manager Zheng Xinlin of the Institutional Business Department of IB introduced, “therefore, we had the idea that we might ally with more banks to extend the service network and meanwhile, we could attract their settlement funds for our own use. This was our original idea.”
Thus, a simple cooperation idea was born – in 2004, IB put forward the development conception of bank-bank platform featuring “serving as agencies mutually based on networked cooperation”; in 2007, the bank-bank platform began its frog-lead tour, and IB founded the Banking Cooperation Services Center in Shanghai, responsible for innovation in bank-bank cooperation and promotion of bank-bank cooperation business; in December of the same year, the bank officially released the inter-bank cooperation brand of “bank-bank platform”, and further improved its product and service system, with its business areas further extended to cover eight business sectors including payment and settlement, wealth management, output of technological management service, financing service, agency of international settlement, capital and asset-liability structure improvement, capital utilization, and training and exchange.
“What's more important is that the bank-bank platform begins to transform and sublime its development idea and we will build it into an integrated win-win financial service platform jointly constructed, owned and shared by IB and small- and medium-sized banks rather than confine it to our bank alone.” In order to practice this idea, Zheng Xinlin said, with innovative products including counter pass and wealth management portal coming into existence as the situation requires, the bank-bank platform began its upgrading from “serving as agencies mutually” to “being interconnected”.
Now, the “bank-bank platform” of IB has 446 banks signing agreement for cooperation, with more than 25,600 banking outlets connected by the counter pass, and more than 110 banks in cooperation for construction and custody of IT system.
Inclusive Finance Network on Hand
“From the end of this year, all customers of rural credit cooperatives across Jilin Province can handle businesses via counter pass around China”. After hearing the news, Mr. Liu, who was handling business in an outlet of a rural credit cooperative, felt very happy. He can travel around China without applying for new cards.
As learnt by the reporter, now IB has signed the bank-bank platform cooperation agreement with 20 rural financial institutions at the provincial level. Customers of small- and medium-sized banks can access banks across China with the 25,600 outlets connected by the counter pass of the bank-bank platform.
Furthermore, in recent years, the bank-bank platform released the wealth management portal innovatively to provide integrated wealth management services to terminal customers of cooperative banks, closely combining the advantageous products of IB and advantageous channels and outlets of cooperative banks.
Via the wealth management portal, IB may enable its outstanding financial products to reach the rural areas and enrich the product lines of small- and medium-sized banks so that residents in regions with underdeveloped financial services can also enjoy superior financial services. Just with the wealth management portal, Mr. Li living in a small city of Qinghai can buy wealth management products of IB at the business outlet of the Bank of Qinghai. From 2007 to the end of 2013, the wealth management products of IB sold by the bank to its terminal customers totaled RMB 10.145 billion, meeting the wealth management needs of local customers in an effective manner.
What's noteworthy is that the bank-bank platform has, supporting rural credit cooperatives and rural banks in the aspects including output of technological management, agency payment, system outsourcing and training service, fully improved the technology-based governance and business management levels of small- and medium-sized banks, serving the construction of the new rural financial system.
In recent years, the bank-bank platform provided rural banks with integrated service solutions, which has solved many difficult problems of rural banks including organization preparation, system construction, compliance management, and payment and settlement. Now, more than 100 rural banks have entrusted their core systems to IB for construction and custody, and 120 ones have realized agent access to the modern payment system via IB, thus settling the problem of “isolated payment island”.
Hengfeng Rural Bank of Panjin, Liaoning has removed its worries depending on the technological system of IB. After receiving the technological output service provided by IB, the bank settled the harassment of insufficient IT support quickly. President Jing of the bank said: “Now, with the core system built by and entrusted to IB, we can develop our business free of cares finally. The diversified service approaches offered by the bank-bank platform can help us to fulfill our dream to grow bigger and stronger!”
Further Acceleration Boosted by Innovation
In the opinion of Zheng Xinlin, the bank-bank platform broke through the conventional model in which competition overwhelms cooperation between banks. Through improving the level of modernized business operation and management of small-sized and medium-sized banks, enriching their product lines, and improving their market competitiveness, IB has created a new situation for achieving win-win results and common development.
To help competitors to grow bigger and stronger is cooperation rather than rivalry. IB innovatively released its own business philosophy.
The development of the bank-bank platform is a process of constant innovation and outperformance.
There can be no construction without destruction. The “bank-bank platform” of IB has changed the conventional idea that domestic commercial banks mainly develop corporate customers and personal customers, taking financial institutions including small- and medium-sized ones as an important customer group to carry out marketing and provide services. And “by taking management, technology and business process as outputable products, we provide comprehensive financial service solutions for various cooperative banks, not only exploring brand-new business areas, but also making bold attempt to transform our business development model and profiting model”, said Zheng Xinlin. Meanwhile, the bank-bank platform, through technological innovation, convey the successive innovative financial products of IB to financial institutions networked by the platform, such as third-party depository, precious metal trading and third-party payment, winning great population among cooperative banks.
In order to improve the service level and protect the security of customer information effectively, IB has made active innovation in the organizational management system. It embedded an IT team in the Banking Cooperation Services Center of the Head Office, responsible for product development, and implementation, operation and maintenance of technological output projects of the bank-bank platform, effectively improving the development efficiency and service level. Furthermore, in order to guarantee that the achievements of technological development can be transformed into products of the bank-bank platform, keep the technological output at an advanced position, and provide powerful technical support for the bank-bank platform, IB has also set up a special bank-bank cooperation support team in the IT Department of the Head Office.
As all participants in the bank-bank platform based cooperation are banking institutions, it is unavoidable to have crossed outlets, customers and businesses. The above organizational departments established also enable customer information and data of the platform to be isolated from the customer information of IB stringently and guarantee the security of customer information in an effective way, thus winning the trust of small- and medium-sized banks.
With the coming of the age of internet finance, the website and mobile client of the wealth management portal are important carriers for IB to develop the internet finance. The wealth management website is put into operation in August 2011. At present, it provides the following products and services: wealth management product, fund, precious metal, bank-securities transfer, and fast payment. The mobile client has also landed at APP STORE and Android system. With the combination of offline and online channels, IB will start a new innovation course. Director Li Jianbao of the Banking Cooperation Services Center of IB indicated, “good arrangements are made in advance for the development direction and commanding height of competition for the business of internet finance in the future”.