By Chao Deng
TIANJIN, China--Chinese banks need to focus on leveraging
technologies such as mobile services as they shift more toward
consumption-based lending, said banking executives at the World
Economic Forum in Tianjin Tuesday.
Such a shift is important for Chinese banks which have relied
heavily on VIP or high net worth clients, said Ma Weihua, chief
executive officer of China Merchants Bank Co. (3968.HK). "I.T. is
like oxygen, air to the banks," he said, adding that internet
services in particular will shape commercial banking in China.
Morris Li Ming Shieh, president of China Guangfa Bank, echoed
these sentiments, saying that his bank has already begun to explore
innovative technologies with its "smart service" mobile payment
options. "Banks here can leapfrog (the stage of building) physical
infrastructure," he added, referring to the decreased need to build
physical branches as services move online.
The comments come at a time when profit growth at Chinese banks
has weakened sharply amid dwindling loan demand as the world's
second-largest economy slows. Such a slowdown in the Chinese
banking sector is "nothing but natural," said Mr. Ma, adding that
banks face a tougher macroeconomic environment as well as narrowing
margins following Beijing's recent moves to gradually liberalize
interest rates.
Mr. Shieh said that the current period is a good opportunity for
Chinese banks to reposition their strategies, which should include
lending to more retail and small-to-medium-enterprises in the next
five years and a focus on technological services.
Jaspal Bindra, chief executive officer for Asia at Standard
Chartered Bank, also underscored the need for banks to upgrade
their technologies, in particular via mobile communications and the
Internet, in light of what has been happening in the West.
"Mobile banking is estimated to cross one trillion U.S.
dollars... Facebook already earns $500 million just on payments
every year," he said. "69% of consumers in Asia are willing to go
mobile for commerce (transactions)," he added, speaking of the
potential expansion of mobile banking in Asia.
Write to Chao Deng at chao.deng@dowjones.com
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