Deloitte: Pratt & Whitney Finance and FinTech will become the focus of the future banking industry

On May 7th, Deloitte released a report titled “Moving Forward, A New Chapter of Wisdom: Review and Prospect of the Development of China’s Banking Industry in 2019-2020”. The report shows that China continues to develop steadily in the field of traditional commercial banks. Inclusive Finance and Fintech It will become an important profit growth point for the banking industry in the future.

The banking industry under the impact of the epidemic: the overall risk can be controlled

Under the influence of the covid-19 epidemic, major global economies are facing many difficulties this year. Major developed economies are expected to fall into negative growth, and the world will further increase the easing model to stimulate market recovery. As far as China is concerned, with the gradual control of the epidemic and the resumption of production and production, the Q2 economy is expected to improve significantly, but it is still a relatively flat growth. The epidemic inevitably affects the business and performance of financial institutions, but the overall risk is controllable. At the same time, the official website of the central bank will continue to be accurate to support the financing of physical enterprises.

Shi Zhonghui, Deloitte China audit and assurance partner, said: “After the SARS in 2003 and the financial turmoil in 2008, in the past few years, the risk control level and regulatory requirements of the domestic financial industry have become stricter, and the overall operation of the Chinese banking industry has been stable. At the end of 2019, the provision coverage ratio of commercial banks exceeded 180% and the loan provision ratio exceeded 3%. This shows that banks have sufficient provisions and have a strong risk tolerance. “

Shi Zhonghui made the following judgments on the banking industry under the epidemic: 1. Digital inclusive finance has become the focus of bank layout; 2. The unhealthy pressure on small and medium-sized banks has increased; 3. Credit growth is expected to accelerate; 4. Liquidity expectations are loose , Market sentiment boosted.

Customer-centric to promote the Crypto transformation of banks

With the rise of Internet and financial technology companies and the breaking of information barriers, big data and information technology are gradually overturning banks’ past business models. In the special era of full-scale Cryptoization, traditional banks are faced with the impact of various financial technology companies and the squeeze of leading banks, on the other hand, they are slightly behind in customer experience optimization and product update iteration. Under the triple stimulus of internal and external competition pressures, drastic changes in customer demand and diversified channel products, it is imperative for banks to “promote the Crypto transformation of banks with customer as the center”.

Currently, the customer-centric Crypto transformation of the banking industry also faces multiple challenges, including cognition, technology, personnel, and data security. In this regard, Qinde put forward three suggestions: 1. Decision makers should use a strategic perspective to layout Crypto transformation; 2. Banks should always uphold the concept of “data security is the red line”; 3. Banks should unify the whole bank’s recognition of Crypto transformation know.

The covid-19 epidemic has become a catalyst for banks’ Crypto transformation. Under the epidemic, people’s production and lifestyle have changed accordingly. In the past, the banking industry, which mainly focuses on offline exhibition industry, is also actively exploring the “zero-touch” online service method. The demand for Crypto transformation of bank outlets is more urgent, and the customer line The level of Shanghai will be significantly improved.

Guo Xinhua, Deloitte China Banking and Capital Markets Industry Leader, said: “The impact of the epidemic has further highlighted the importance of commercial banks’ Crypto capabilities. The overall quality of banking assets is under pressure, but institutions with better Crypto transformation will welcome A wider range of business opportunities. During the epidemic prevention and control period, fintech helped bank institutions to develop their “contactless” businesses and played an important role in Crypto payment settlement, online credit, and online transaction settlement.

Listed banks have solid performance in 2019, and technological empowerment will lead to change

Looking at the overall performance of listed banks in 2019, domestic banks’ revenue capacity is stable. From 2015 to 2019, the overall profitability of large commercial banks rose steadily, maintaining growth resilience, and various operating incomes were relatively stable. However, the overall yield index, net interest margin, and net interest margin of large commercial banks showed a downward trend.

In 2019, the credit cost ratio of large commercial banks showed an inflection point, and the cost-income ratio declined slowly.

In terms of assets, the scale of total assets of large commercial banks expanded steadily, the proportion of credit assets increased rapidly, the overall non-performing indicators were optimized, and the risk compensation ability was improved. At the same time, the liability structure of large commercial banks is relatively stable, and the proportion has always remained at around 80%.

In terms of global market recognition, as a whole, domestic global systemically important banks are relatively large in scale and relevance indicators due to their large scale, while the indicators of substitutability, complexity and global activity are moderately low. The market recognition of large commercial banks still needs to be improved.

In 2019, large commercial banks have made significant efforts in the field of financial technology. As the People’s Bank issued the “Financial Technology (FinTech) Development Plan (2019-2021)” guidance, large commercial banks began to develop financial technology development plans that meet their own needs. Through the establishment of financial technology companies, financial research institutes, etc., to quickly promote financial Transformation of technology.

Guo Xinhua pointed out: “In the future, the combination of inclusive finance and fintech, namely Crypto inclusive finance, will become the focus of the future banking industry. The management of banking institutions needs to focus more on establishing new ways of thinking, that is, how to be most effective Use technology, people, and processes to achieve Crypto transformation. Only those financial institutions that have a collaborative and innovative cultural mechanism to drive change can achieve real returns on technology investments over the next decade. “

Leave a Reply
Related Posts

Euler Finance: Openness is the ultimate imagination of DeFi 2.0

Why do we often emphasize openness? Because of decentralization, everyone can become a creator is the most fundamental feature of DeFi. Now as this emerging market gradually grows, its development is indeed diverse, complex and highly integrated. But then we should note that…
Read More