The Bank Branch In China Is Dead (And Why It’ll Probably Happen Here)

The Bank Branch In China Is Dead (And Why It’ll Probably Happen Here)
SHARE
THIS



By 2020 China will most likely be Asia’s biggest retail market, and already a clear majority of consumers says they would happily bank ‘digital only’ according to McKinsey & Company. The implications for incumbents and insurgents alike are enormous and they probably don’t stop at the border.

According to the study called Four Trends Shaping China’s Retail Banking Landscape which the management consultants released earlier this year ( and which followed on from earlier reports in 1998, 2007 and 2011) “For retail banks, a key to success in the future is moving toward more of a total relationship model. Internet players, for their part, must better understand how to integrate financial services with the Chinese consumer’s digital lifestyle.”

The authors, Kenny Lam, Jared Shu, and Elaine Huang reveal that China’s retail banking revenues have grown 30 percent a year since 2009 and could exceed RMB 2.6 trillion (over US$430 billion) by 2020. They argue that intense competition for the Chinese retail banking consumer’s wallet has accompanied this fast growth.

“Meanwhile, the retail banking landscape has faced several challenges, including interest rate liberalization, major regulatory changes, and the rise of digital finance.”

Among the key findings;

Highlights of our current research include:

  • Chinese consumers are still among the least loyal in Asia. For example, less than half of Chinese consumers will remain loyal to their primary bank when offered more attractive pricing terms from competitors, compared with nearly 70 per cent in emerging Asia.
  • Consumer needs and behaviors are becoming increasingly similar across China. For example, penetration of several banking products now varies by less than 5 per cent across tier cities.
  • The country’s “Big Four” banks are less dominant. For example, their market share is eroding across tier cities and income segments.
  • Digital banking is going mainstream. Today, more than 70 per cent of Chinese consumers say they would open an account with a pure digital bank.

Market participants have identified the so called banking heavy users as the most prized digital consumer for both banks and Internet companies. “These consumers have an average of 4.5 to 6.0 banking products compared with 2.5 to 3.0 products for a non-user. For basic users, the average number of products is 3.5 to 4.0,” say the authors.

Some description

And the management consults have some specific advice for internet providers in the country.

“Our findings also suggested a way forward for Internet companies seeking to increase their share of the retail market” they say, suggesting the insurgents should “…target the traditionally ‘un-bankable’ segment  that financial services companies do not traditionally focus on and develop an ‘affluent-like’ value proposition that can only be delivered economically by Internet companies.”

They also recommend capturing the digital wallet share of both heavy and basic users with a value proposition that fully integrates with the digital lifestyles of these segments . And the management consultants suggest putting security at the forefront of marketing initiatives to generate user traffic and comfort around the risk associated with online purchases of financial products.

Finally they suggest that it may not pay to be to pure and that online players might consider setting up an offline presence to build trust with consumers.

 

Please login with linkedin to comment

Advertising Standards Bureau Creative Cloud Gogglebox

Latest News

Seattle, USA - Oct 15, 2019: The entrance sign to the new Google building in the south lake union area at sunset.
  • Technology

Explained: The ACCC’s Latest Plan To Control Google

Australia’s competition watchdog wants more power to control Google and its dominance over the advertising technology space.   Today the ACCC has released the long-awaited Digital advertising services inquiry – final report, which comes more than 18 months after the Australian government initiated the inquiry. As was expected, the report looks closely at the dominance […]

by B&T Magazine

B&T Magazine
Rapper Ludacris Creates Netflix Kid’s TV Show ‘Karma’s World’
  • Media

Rapper Ludacris Creates Netflix Kid’s TV Show ‘Karma’s World’

Ludacris, AKA Chris Bridges, has moved from the rap, acting and philanthropy worlds to enter unexpected territory: kid’s TV. Ludacris, who acted in Crash and the Fast And The Furious franchise, is the brains (and executive producer) behind new Netflix kid’s show, Karma’s World. The program follows Karma, an aspiring musical artist and rapper with huge talent […]

Resolution Digital Makes Two New Hires, Expanding Digital Transformation Team
  • Marketing

Resolution Digital Makes Two New Hires, Expanding Digital Transformation Team

Resolution Digital, full-service digital agency for the Omnicom Media Group, has bolstered their digital transformation team with new senior hires. The hires come during a rapid period of growth for the agency, as clients continue to invest heavily in digital solutions to create outstanding customer experiences. The new hires include director Callum Pendleton (pictured left) […]

Twitch Partners With Group M For APAC First!
  • Media
  • Technology

Twitch Partners With Group M For APAC First!

GroupM and Twitch have announced an industry-leading partnership. For the first time in APAC, Twitch is partnering with an agency network, where the collaboration will enable brands and advertisers across the Asia Pacific region to access unique insights into the popular video live streaming service’s diverse audiences. Twitch’s global community sees millions of people coming […]

Six Screen Creatives Announced For 2021 Emerging Writers’ Incubator Initiative
  • Media

Six Screen Creatives Announced For 2021 Emerging Writers’ Incubator Initiative

Six screenwriting creatives from across Australia have been selected as the inaugural participants in the Emerging Writers’ Incubator.  The Incubator is an initiative from SBS in partnership with Screen Australia, state and territory agencies Film Victoria, Screen Canberra, Screen NSW, Screen Queensland, Screenwest and the South Australian Film Corporation, and with the assistance of the […]

Omnicom Media Group The First Australian Business To Complete Amazon Advertising’s OMEGA Training
  • Advertising

Omnicom Media Group The First Australian Business To Complete Amazon Advertising’s OMEGA Training

In a first of its kind for Australia, Amazon Advertising and Omnicom Media Group (OMG) has partnered on a comprehensive program. The pogram covers retail strategy, operations, catalogue management, advertising, brand building, retail marketing & the suite of tools, analytics and insights available through the Amazon Advertising platform. The eCommerce Accelerator Program known as OMEGA […]

This Way Up: Australia’s Advertising Festival Of Creativity Rescheduled To 2022
  • Advertising

This Way Up: Australia’s Advertising Festival Of Creativity Rescheduled To 2022

The Australasian Writers and Art Directors Association (AWARD) has announced that This Way Up, Australia’s Advertising Festival of Creativity, will be rescheduled to August 2022. Yet signature events celebrating the industry’s brightest talent and creative work will still go ahead this November. The announcement of the special award winners for this year’s AWARD Awards will […]

Monday TV Wrap: The Block Builds Nine A Nightly Win (And A Lovely New Kitchen Extension)
  • Media

Monday TV Wrap: The Block Builds Nine A Nightly Win (And A Lovely New Kitchen Extension)

Last night’s episode of The Block fell from Sunday night’s viewership, but still easily secured a win in entertainment, and for Nine overall. The episode had a metro audience of 876,000 according to OzTAM, with a spanner thrown in the works of one team’s sunken lounge plans (truly devastating for any 1970’s conversation pit fans). Contestants […]

by B&T Magazine

B&T Magazine
Bangkok, Thailand - Jun 23, 2015 : Group of credit cards on computer keyboard with VISA and MasterCard brand logos
  • Technology

Loyalty Republic Launches Card Agnostic Rewards Program

Australian start-up Loyalty Republic is introducing Australia’s first bank and card agnostic direct earn rewards program to democratise loyalty and make rewards accessible and fair for anyone using a debit card. The Loyalty Republic mobile app will place consumers in control of their rewards earning potential and redemption options, with a simplified model offering 1 point per $1 spent on debit card […]

Amobee Announces Partnership With Samsung Ads
  • Technology

Amobee Announces Partnership With Samsung Ads

Amobee has announced a new partnership with Samsung Ads in Australia. Powered by deep analytics and industry-leading technology, the partnership will enable marketers to bridge the gap between linear and digital – from execution to measurement. Samsung Ads’ Automatic Content Recognition (ACR) data from over 1.8 million smart TVs, along with Amobee’s household data of […]

How To Use Social Media Insights To Understand What’s Impacting Your Brand’s Health
  • Partner Content

How To Use Social Media Insights To Understand What’s Impacting Your Brand’s Health

Here, Zavy’s David Bowes explains how advertisers can use insights from social media to ensure their social and content strategies are fit for the road. When we learn to drive, we’re taught how to “drive to the conditions”. Slow down when its raining, or when there’s ice on the roads, reduce your speed on gravel […]

Partner Content

by B&T Magazine

B&T Magazine
Facebook Hits Pause On Instagram Kids
  • Technology

Facebook Hits Pause On Instagram Kids

Facebook hits pause on Instagram Kids project. Zuckerberg still working on his giant laser & flying monkeys, however.

by B&T Magazine

B&T Magazine
Hungry Vax, Jabstar, JAB Hi-Fi: Aussie Designers Give Iconic Logos A Pro-Vax Revamp
  • Media
  • Technology

Hungry Vax, Jabstar, JAB Hi-Fi: Aussie Designers Give Iconic Logos A Pro-Vax Revamp

Crowdsourcing platforms DesignCrowd and BrandCrowd are promoting vaccination efforts in a unique way, launching a logo redesign contest among their networks of designers. The initiative saw iconic Australian brands such as Hungry Jack’s, Jetstar, JB Hi-Fi, and Bunnings undergo a redesign.  “We thought it would be fun to see some other iconic Australian brands back […]

Connection As Currency – How DTC Brands Are Changing Commerce
  • Opinion

Connection As Currency – How DTC Brands Are Changing Commerce

James Horne (main photo) is the CEO of Balance Internet. In this guest post, he says direct-to-consumer DTC brands that endure past the initial launch have a true differentiation, standing out from competitors by driving connection… We’ve always known that brands need more than a good product and website to stand out from their competitors […]

Opinion

by B&T Magazine

B&T Magazine
Vision6 Launches First-Ever National Brand Campaign “Simply Reliable”
  • Advertising
  • Campaigns

Vision6 Launches First-Ever National Brand Campaign “Simply Reliable”

Australian owned and operated email and SMS marketing software company, Vision6, announced the launch of its first-ever national brand campaign and new brand platform “Simply Reliable”. Founded in 2001, Vision6 was one of the first email marketing software providers in Australia and has since been relied upon by thousands of Aussie businesses and organisations for […]

JCDecaux New Zealand Grows Its Team To Lead Street Furniture Tender
  • Media

JCDecaux New Zealand Grows Its Team To Lead Street Furniture Tender

Out-of-Home media company JCDecaux New Zealand has appointed business growth specialist Adam McGregor in preparation for its bid to win upcoming local government street furniture tenders across the country. With contracts for the provision of street furniture including bus shelters across New Zealand up for renewal from late 2022, they collectively represent the biggest advertising […]