How to change the profit model of the banking industry?

Under the new normal, China's banking industry has shown changes such as the stabilization of loan growth rate, the narrowing of deposit-loan spreads, the transformation of social financing methods, the rebound of non-performing loans, and the "lenient management" of supervision. This requires the banking industry to speed up the adjustment of its development strategy, change its profit model, enhance its innovation ability, prevent and resolve potential risks, and operate in compliance with the law.

With the gradual improvement of interest rate marketization, the spread will be further narrowed and the proportion of interest income will be further reduced. The traditional profit model of eating spreads on a large scale is unsustainable and the profit model must be changed.

Generally speaking, the banking industry can consider focusing on the following aspects:

The first is to ask for benefits from management. Strengthen refined management, reshape business processes and reduce operating costs.

The second is to benefit from pricing. Improve the ability of product pricing and interest rate risk management, and achieve the goal of obtaining profits, covering risks and sustainable business by building an effective mechanism for avoiding, dispersing, transferring and compensating interest rate risks.

The third is to benefit from risk control. Take effective measures to improve the quality of assets, reduce the proportion of non-performing loans, and avoid the phenomenon that bad growth erodes profits excessively.

The fourth is to benefit from service. Actively improve service quality, change service mode, subdivide service market, speed up service upgrade, provide customers with more personalized, professional and all-round financial services, and enhance customer stickiness.