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Retail Banks - China - January 2017

Published By :

Mintel

Published Date : Jan 2017

Category :

Banking

No. of Pages : N/A

Consumer experience now has a much broader definition than solely good customer service attitude. To be outstanding, retail banks need to differentiate on aspects like professionalism and efficiency. It is worth noticing that the benchmark used by consumers is their experience in different categories, so ensuring the performance is competitive across industries is critical

Table of Content

OVERVIEW

What you need to know
Covered in this Report
Definitions
Excluded

EXECUTIVE SUMMARY
The market
Figure 1: Best- and worst-case forecast of China retail bank market value, 2011-21
Figure 2: Interest income of retail banks and its proportion in the total revenue, 2011-16 (est)
Companies and brands
Figure 3: Retail banks’ market shares, 2016 (est)
Figure 4: Retail banking revenue proportion and YOY growth rate of leading banks, 2016 (est)
The consumer
Who are the main decision makers?
Figure 5: Wealth management responsibility, by gender and age, November 2016
Which banks’ services are more widely used?
Figure 6: Average bank accounts owned and top three banks, by account type, November 2016
Figure 7: The most often used bank accounts, November 2016
Figure 8: Overall satisfaction rates of banks, percentage of frequent users who rate ‘very satisfied’, November 2016
What are the key satisfaction influencing factors?
Figure 9: Key drivers of overall satisfaction with Bank of China, November 2016
What kind of information can interest Chinese consumers?
What are the wealth management preferences of Chinese consumers?
Figure 10: Wealth management preferences, by MinTs and Non-MinTs, November 2016
What we think

ISSUES AND INSIGHTS
What are the key aspects retail banks should consider to differentiate?
The facts
The implications
How to attract affluent customers?
The facts
The implications
What would be the next generation of retail banks?
The facts
The implications

THE MARKET – WHAT YOU NEED TO KNOW
Retail banking market size to exceed RMB 3.5 trillion in 2021
Changing revenue structure of retail banks
Competition leads to efficiency

MARKET SIZE AND FORECAST
A RMB 2 trillion market in 2016
Figure 11: Best- and worst-case forecast of China retail bank market value, 2011-21
The revenue structure of retail banks is changing
Figure 12: Interest income of retail banks and its proportion in the total revenue, 2011-16 (est)

MARKET FACTORS
Increasing mortgages
Figure 13: Year-end outstanding mortgages and growth rate, 2011-16 (est)
Better controlled interest-rate spread
Figure 14: One-year base loans and savings rates and interest-rate spread, 2010-16
Threats from internet finance sector
Changing wealth management attitudes of consumers

KEY PLAYERS – WHAT YOU NEED TO KNOW
The Big Four are losing share to other commercial banks
Competing at different stages
Technology as the key innovation power of retail banks

MARKET SHARE
More than half of the market in hands of the top ten
Figure 15: Retail banks’ market shares, 2016 (est)
BOC has the best performance among the Big Four
Figure 16: Changes of leading retail banks in market share, in percentage points, 2015-16 (est)
Retail banking business at different development stages
Figure 17: Retail banking revenue proportion and YOY growth rate of leading banks, 2016 (est)

COMPETITIVE STRATEGIES
Targeting young adults
Figure 18: The Palace Museum themed luggage tags introduced by CMB and Gugong Taobao
Valuing overseas market
Developing together with rural areas
Figure 19: An opening ceremony of a PSBC branch in Baqing County, Tibet
Screening high-end customers
Figure 20: Credit card series introduced by HSBC, ‘Living Platinum’, ‘Traveling Platinum’ and ‘Premier Investment’, 2016

WHO’S INNOVATING?
Leveraging the power of big data in credit verification
Device-centred community branches
Figure 21: A self-serving terminal in one ICBC branch
Extended opening time
Figure 22: Night of Finance’ event by one ICBC Shanghai branch
AI-assisted banking service

THE CONSUMER – WHAT YOU NEED TO KNOW
Females take more responsibilities in household wealth management
Investment account ownership is under cultivation
BOC enjoys the top satisfaction rate
Affluent consumers are more confident in investment with a broader vision

WEALTH MANAGEMENT RESPONSIBILITY
Females taking more wealth management responsibilities
Figure 23: Wealth management responsibility, by gender and age, November 2016
Full-time employees and high earners take more wealth management responsibility
Figure 24: Wealth management responsibility, by income, working status and company type, November 2016
More of a family decision in North and Mid-west regions
Figure 25: Wealth management responsibility, by city tiers and regions, November 2016

TYPES OF BANK ACCOUNTS OWNED
Consumers have savings accounts in more than three banks
CMB and BOC are more successful at targeting affluent consumers
Figure 26: Types of bank accounts owned, savings account/debit card, November 2016
Consumers have loan accounts in two banks on average
Young consumers prefer CMB for loans
Figure 27: Types of bank accounts owned, loan account/credit card, November 2016
One in four consumers does not have any investment account yet
Figure 28: Types of bank accounts owned, investment account, November 2016
Joint-equity commercial bank investment account holders are more likely to switch
Figure 29: Ownership of investment accounts, by savings account/debit card ownership, November 2016

MOST USED BANK ACCOUNTS
ICBC and CCB are the most welcomed banks
Figure 30: The most often used bank accounts, November 2016
High usage frequency requires a balanced performance
Figure 31: The most often used bank accounts, by accounts type, November 2016

SATISFACTION INFLUENCING FACTORS
Penetration does not speak for satisfaction
Figure 32: Overall satisfaction rates of banks, November 2016
Common unsatisfactory factors of retail banks
Professionalism leads to perfection
Figure 33: Key drivers of overall satisfaction with Bank of China, November 2016
Transaction efficiency should be improved
Figure 34: Key drivers of overall satisfaction with Agricultural Bank of China, November 2016
CMB stands out in online banking
Figure 35: Key drivers of overall satisfaction with China Merchants Bank, November 2016

INTERESTED INFORMATION
Investors prefer practical information
Affluent consumers have a wider range of needs
Figure 36: Interested information, November 2016
Rising attention on wealth inheritance service
Males and females have different emphasises

INTERESTED MOBILE BANKING SERVICES
Diversified needs of different consumer groups
Figure 37: Interest in mobile banking services, November 2016
The linkages between different mobile banking services

WEALTH MANAGEMENT PREFERENCE
The majority are risk-averse investors
Figure 38: risk management preference, November 2016
Lack of trust in financial advisors
Figure 39: Investment product selection criteria, November 2016
Figure 40: The most often used investment accounts, by preference on advisors, November 2016
Internet financial institutions are gaining ground
Figure 41: Investment channels preference, November 2016
Investors with higher education still value the professionalism of banks
Figure 42: Investment channels preference, by risk management preference and preference on advisors, November 2016
Most people prefer not ‘putting all their eggs in one basket’
Figure 43: Investment diversification preference, November 2016

MEET THE MINTROPOLITANS
MinTs takes up more wealth management responsibly
Figure 44: Wealth management responsibility, by MinTs and Non-MinTs, November 2016
BOC’s overseas services make it more popular among MinTs
Figure 45: Differences between MinTs and Non-MinTs in account ownerships and usage frequencies of banks, November 2016
MinTs have broader investment vision, especially overseas investments and high-end medical insurance
Figure 46: Interested information, MinTs versus Non-MinTs, November 2016
MinTs show more confidence in investment
Figure 47: Wealth management preferences, by MinTs and Non-MinTs, November 2016

APPENDIX – MARKET SIZE AND FORECAST
Figure 48: Market value of retail banks and forecast, 2011-21

APPENDIX – METHODOLOGY AND ABBREVIATIONS
Methodology
Key driver analysis methodology
Key driver analysis results
Figure 49: Key drivers of overall satisfaction with Bank of Communications, November 2016
Figure 50: Key drivers of overall satisfaction with Industrial and Commercial Bank of China, November 2016
Figure 51: Key drivers of overall satisfaction with China Construction Bank, November 2016
Fan chart forecast
Abbreviations

List of Table

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