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On May 10, Postal Savings Bank of China (“PSBC”) held 2019 Capital Market Open Day with the theme of “Integration, Empowerment and Rebuilding: To Create a New Blue Sea of Retail” in Beijing.During the activity, PSBC comprehensively displayed its highlights and great development potential in aspects including electronic payment, online consumer credit, rural e-commerce, Sannong finance, synergy with strategic partners, and outlet transformation through keynote speeches, management dialogs, interactive communication, experience of smart bank, etc..Over 70 investors and analysts from renowned domestic and overseas institutions participated in the activity.PSBC’s Chairman Zhang Jinliang, Vice Presidents Qu Jiawen and Shao Zhibao, Directors Han Wenbo, Tang Jian and Liu Yaogong, Secretary of the Board Du Chunye, heads of departments at the head office, Beijing Branch and Shenzhen Branch as well as some heads of PSBC’s partners also attended the event.
Strengthening strategy implementation and carrying through the blueprint
The year 2019 is the 100th anniversary of postal savings business and also the first year for PSBC to be listed among the big state-owned banks of China.In 12 years since its establishment, PSBC has not only gained unique advantages in growth, profitability, asset side, liability side and channel side but also developed the one and only “directly operated outlets + agency outlets” model in the Chinese banking industry.
As the industry is undergoing drastic changes and increasingly severe differentiation, what are the focuses of PSBC’s efforts in its future transformation and development? How will PSBC give play to its own advantages to get on the new track of high-quality development?Those are the challenges faced by young PSBC.
Zhang Jinliang said on Capital Market Open Day that PSBC will deepen the financial supply-side structural reform, give full play to its advantage in resources, increase support to the real economy, further promote transformation in five aspects, which are to make the Bank unique, comprehensive, light, intelligent and intensive, and strengthen the four pillars of headquarters leadership, risk management, information technology and human capital.The top priority is to do well in strategy implementation, technological empowerment, talent training and mechanism rebuilding.
Since its establishment, PSBC has determined the positioning of serving communities, small and medium-sized enterprises, and Sannong (agriculture, rural areas and farmers). After years of development, it has also set a development strategy of “one body with two wings”, with retail as the body and corporate business and financial market business as the two wings. The strategy not only fits PSBC’s resource endowment and the needs of financial supply-side structural reform, but also conforms to the banking industry transformation trend that “those who win retail win everything”, driving PSBC to gradually grow into an important force in the Chinese banking industry system.
As at the end of the first quarter, the assets of PSBC exceeded RMB10 trillion, and pre-provision profit and net profit increased to RMB31,955 million and RMB18,549 million respectively, up by 14.39% and 12.28% year on year respectively. Net profit regained a two-digit growth.PSBC owned more than one sixth of China commercial banks' outlets, and had 584 million of individual customers, serving over one third of Chinese people.
The AUM of retail customers is a touchstone of the retail business of banks.As at the end of the first quarter of 2019, the AUM of PSBC was RMB9.91 trillion, up by 6.93% from the end of last year, ranking among the top of the industry.
“PSBC’s strategic vision of building a first-tier large retail commercial bank has enjoyed popular support. Now is the critical time to ‘act instead of formulating guiding principles’.What we should do is to enhance strategy willpower, strengthen strategy implementation, work solidly to carry through the blueprint and take actions to create value, so as to benefit shareholders.”Zhang Jinliangsaid.
Speaking of PSBC’s “directly-operated outlets + agency outlets” model, Zhang Jinliang noted that this special and important institutional arrangement has, on the one hand, brought a differentiated competitive edge to PSBC, and on the other hand, enabled PSBC to better serve the real economy and meet diversified service demands of people by making use of China Post’s huge network and customer resources.
It’s learnt that besides nearly 40,000 PSBC outlets, China Post has over 600,000 ULE franchised outlets, which use China Post’s rural e-commerce platform “Post Shop Owner” system for batch purchase, storage, and retail sales, while offering a variety of services including service for the convenience of customers, withdrawal service for farmers, customer referral and parcel collecting and delivering agency services, thus accumulating a large amount of data and generating a number of synergistic scenarios, bringing great business expansion space for PSBC.“The key of the next step is to digitalize and productize those scenarios and speed up the development of customer resources and data to create a new growth pole.”Zhang Jinliang said.
“China Post Group’s business covers three major sections, namely universal postal service, finance and express and logistics, integrating goods flow, fund flow and information flow.There is a huge cooperation space between China Post Group and PSBC. We will strengthen overall arrangement and coordination, actively promote and accelerate the implementation of such cooperation through integration and effective sharing of resources, and maintain the Bank’s growth and high-quality development.”Zhang Jinliangsaid.
Deepening system and mechanism reform and making the Bank stronger through talents
The capital market has always been looking forward to new measures and new outlook that PSBC’s new board of directors will take to deepen reforms.
Systems and mechanisms are the foundation. Mechanisms are necessary for the implementation of strategies.Zhang Jinliang noted that it’s necessary to push key business and sections with a high marketization degree to the market to compete under market-oriented mechanisms;an incentive system with market competitiveness should be established;position system should be improved, and personnel selection and employment mechanism be optimized to ensure personnel, positions and remuneration are reasonably distributed and fully stimulate the vitality of the organization.
Talent is the most important resource for the development of an enterprise. Employees are the builders and pioneers of PSBC, the basic guarantee for a lasting foundation and the most valuable treasure.At present, PSBC has over 185,000 employees, with an average age of 36, 70% under 40 years old and nearly 70% owning a bachelor’s degree or above. Employees tend to be younger and highly educated, with increasingly improved professional capability.
According to relevant information, PSBC will focus on building three talent teams, i.e. scientific and technological talent team, investment and research talent team and big data talent team.“We will build a broad career development platform to help employees make good career planning.PSBC has a stage that is large enough for our employees to pursue their dreams to the fullest.”Zhang Jinliangsaid.
Accelerating technological empowerment and deepening outlet transformation
Fintech and digitalization are becoming the core engines of economic and financial development, and driving commercial banks to speed up transformation and upgrading in information technology, business development and management mode.
According to Qu Jiawen, PSBC has attached great importance to IT work, insisted on plan’s leading role and IT empowerment, and spared no effort to promote the implementation of the Bank’s “13th Five-year” IT planning.In the past three years, PSBC has completed the construction of over 400 information projects in accordance with its IT plan, significantly improving IT capacity and level and effectively supporting the transformation and development of the entire bank.
PSBC has actively adapted to the trend of changes in customer behaviors and demands, promoted outlet transformation through IT empowerment, adopted the core goal of improving customer experience and outlet efficiency, emphasized the transformation direction toward intelligent, light and comprehensive outlets, enhanced online and offline all-channel service capability and spared no effort to promote the transformation of outlets into “marketing service centers” and “customer experience centers” that maintain customer relations, provide wealth management services and meet customers’ comprehensive financial demands.
According to relevant information, PSBC is improving the accuracy of customer portrait by building individual customer management data marts to offer refinedfull lifecycle service to customers.The Bank is also expanding the business scope of directly operated outlets and agency outlets by promoting the construction of comprehensive marketing system to enhance the service capability of outlets in all business. In addition, the Bank is actively integrating customer life scenarios into its services by continuing to optimize online transaction channels and build business platforms to develop an interactive ecosphere among banks, merchants and customers. The Bank is strengthening customer segmentation, actively building wealth management and private banking system while maintaining and serving mass customers, so as to enhance the value contribution by middle- and high-end customers.
For example, under the guidance of the head office, PSBC Shenzhen Branch is carrying out a data lab-based cooperation with its strategic investor Tencent to integrate online and offline channels and build “new retail experience centers” with functions including precision marketing, merchant interaction, customer benefits, wealth management centers, public service lectures, business training and display of Youhuifu merchants to attract and retain customers. The cooperation has further optimized the customer group structure of outlets, improved outlets’ earnings capability and created a retail business brand.
Intelligent service is also a focus of PSBC in its IT development.PSBC has continued to increase the research and application of new technologies such as cloud computing, AI, blockchain and Internet of Things, built AI “brains” and technology platforms of blockchain, and expanded the application scenarios of such technologies as facial recognition and intelligent voice.The blockchain-based U chain custody business system has realized real-time and multi-party sharing of information, which has shortened the original business links by over 60%. Forty-two systems including the new generation mobile banking, self-service banking and mobile business development terminal have realized private cloud platform deployment, with the number of daily transactions amounting to over 170 million and reaching a leading level in the industry.
On the site of Capital Market Open Day, under the theme of IT empowerment, PSBC set up five experience areas, namely, Guest Greeting Service, Intelligent Equipment, Retail Banking, Wealth Management and Life Services, which displayed intelligent robots, intelligent teller machines (ITMs), recommendation of personalized products, intelligent wealth management desks, wealth management E stop, mobile business development terminal, smart diagnosis and treatment, point exchange machines and WeChat printers, reflecting the intelligent and scenario-based financial service system integrating finance, life and entertainment and created by PSBC with the latest fintech achievements such as biological recognition, voice recognition and data mining.
“To achieve the goal of technology-driven development, PSBC will invest around 3% of operating income in the IT field every year.”Zhang Jinliangsaid.
“1+3” strategy and consolidating the competitive edge of deposit business
In the mobile Internet era, growth in residents’ wealth and the deepening of interest rate liberalization have brought great changes to the deposit market. Deposits can reflect whether a Bank has met customer demands, solved customers’ pain points and refined customer experience.
To ensure the Bank has sufficient sourcesof savings deposits and further consolidate and improve the Bank’s position and sustainable development capability in the deposit market, PSBC has put forward the “1+3” strategy, in which “1” means IT empowerment and “3” means exploiting potential and advantages, following the trend and building platforms, said Shao Zhibao in his communication with analysts.
PSBC resorts to IT empowerment for development. On the one hand, PSBC has increased efforts in outlet transformation and has realized all-channel data sharing by combining online and offline business channels and making use of information technology such as big data to provide customers with comprehensive and consistent experience. On the other hand, PSBC has realized refined full lifecycle customerservice by building individual customer management data marts and improving the accuracy of customer portrait.
County area is an important source of deposits in the banking industry. PSBC’s outlets cover nearly 99% of counties, giving PSBC an unparalleled advantage over other institutions.Seizing the favorable opportunities presented by rural revitalization and newtype of urbanization, PSBC will improve the quality of and upgrade the development in counties to further consolidate its leading position in deposits in counties while exploiting the potential value of 584 million individual customers and enhancing the endogenous strength for deposit development.
Conforming to the trend of agricultural industrialization, PSBC has further extended services in rural areas to emerging forms of agribusiness such as large agricultural family operations, family farms and specializedrural cooperatives to provide whole-chain services.Following the trend of mobile Internet, PSBC has given play to postal characteristics in rural areas and facilitated the development of rural e-commerce; it has created a unique payment and settlement ecosphere by putting effort into card issuance and bill settlement to serve individual customers and merchants respectively; it has also strengthened external forces for deposit development by increasing efforts in promoting mobile banking, quick card binding and UnionPay Quick Pass.
Moreover, PSBC has, with the new retail thinking, expanded account use “scenarios” and integrated online and offline development through “platforms” like Alipay, WeChat and Quick Pass.The focuses are to expand online customer acquisition platforms by embedding non-physical Class II accounts into Internet payment scenarios, optimize trade payment and settlement platforms by promoting barcode payment and bill settlement business and O2O mobile business platforms, promote co-branded card project platforms, actively explore and build government affairs cooperation platforms and attract both customers and fund flows.
Data show that as at the end of the first quarter of 2019, the balance of deposits of PSBC stood at RMB9.14 trillion, up by 5.97% from the end of last year, and accounting for 94.74% of total liabilities.Individual deposits of PSBC were RMB7.93 trillion. With a share of 10.12% in the individual deposit market, PSBC ranked 4th in the Chinese banking industry.
Extracted from xinhuanet