Table of Contents
Executive Summary
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- The market
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- 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
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- 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?
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- Figure 5: Wealth management responsibility, by gender and age, November 2016
- Which banks’ services are more widely used?
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- Figure 6: Average bank accounts owned and top three banks, by account type, November 2016
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- 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?
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- 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?
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- Figure 10: Wealth management preferences, by MinTs and Non-MinTs, November 2016
- What we think
Issues and Insights
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- 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
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- 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
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- A RMB 2 trillion market in 2016
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- Figure 11: Best- and worst-case forecast of China retail bank market value, 2011-21
- The revenue structure of retail banks is changing
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- Figure 12: Interest income of retail banks and its proportion in the total revenue, 2011-16 (est)
Market Factors
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- Increasing mortgages
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- Figure 13: Year-end outstanding mortgages and growth rate, 2011-16 (est)
- Better controlled interest-rate spread
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- 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
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- 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
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- More than half of the market in hands of the top ten
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- Figure 15: Retail banks’ market shares, 2016 (est)
- BOC has the best performance among the Big Four
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- Figure 16: Changes of leading retail banks in market share, in percentage points, 2015-16 (est)
- Retail banking business at different development stages
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- Figure 17: Retail banking revenue proportion and YOY growth rate of leading banks, 2016 (est)
Competitive Strategies
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- Targeting young adults
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- Figure 18: The Palace Museum themed luggage tags introduced by CMB and Gugong Taobao
- Valuing overseas market
- Developing together with rural areas
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- Figure 19: An opening ceremony of a PSBC branch in Baqing County, Tibet
- Screening high-end customers
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- Figure 20: Credit card series introduced by HSBC, ‘Living Platinum’, ‘Traveling Platinum’ and ‘Premier Investment’, 2016
Who’s Innovating?
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- Leveraging the power of big data in credit verification
- Device-centred community branches
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- Figure 21: A self-serving terminal in one ICBC branch
- Extended opening time
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- Figure 22: Night of Finance’ event by one ICBC Shanghai branch
- AI-assisted banking service
The Consumer – What You Need to Know
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- 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
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- Females taking more wealth management responsibilities
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- Figure 23: Wealth management responsibility, by gender and age, November 2016
- Full-time employees and high earners take more wealth management responsibility
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- 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
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- Figure 25: Wealth management responsibility, by city tiers and regions, November 2016
Types of Bank Accounts Owned
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- Consumers have savings accounts in more than three banks
- CMB and BOC are more successful at targeting affluent consumers
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- 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
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- Figure 27: Types of bank accounts owned, loan account/credit card, November 2016
- One in four consumers does not have any investment account yet
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- Figure 28: Types of bank accounts owned, investment account, November 2016
- Joint-equity commercial bank investment account holders are more likely to switch
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- Figure 29: Ownership of investment accounts, by savings account/debit card ownership, November 2016
Most Used Bank Accounts
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- ICBC and CCB are the most welcomed banks
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- Figure 30: The most often used bank accounts, November 2016
- High usage frequency requires a balanced performance
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- Figure 31: The most often used bank accounts, by accounts type, November 2016
Satisfaction Influencing Factors
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- Penetration does not speak for satisfaction
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- Figure 32: Overall satisfaction rates of banks, November 2016
- Common unsatisfactory factors of retail banks
- Professionalism leads to perfection
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- Figure 33: Key drivers of overall satisfaction with Bank of China, November 2016
- Transaction efficiency should be improved
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- Figure 34: Key drivers of overall satisfaction with Agricultural Bank of China, November 2016
- CMB stands out in online banking
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- Figure 35: Key drivers of overall satisfaction with China Merchants Bank, November 2016
Interested Information
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- Investors prefer practical information
- Affluent consumers have a wider range of needs
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- Figure 36: Interested information, November 2016
- Rising attention on wealth inheritance service
- Males and females have different emphasises
Interested Mobile Banking Services
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- Diversified needs of different consumer groups
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- Figure 37: Interest in mobile banking services, November 2016
- The linkages between different mobile banking services
Wealth Management Preference
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- The majority are risk-averse investors
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- Figure 38: risk management preference, November 2016
- Lack of trust in financial advisors
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- Figure 39: Investment product selection criteria, November 2016
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- Figure 40: The most often used investment accounts, by preference on advisors, November 2016
- Internet financial institutions are gaining ground
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- Figure 41: Investment channels preference, November 2016
- Investors with higher education still value the professionalism of banks
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- 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’
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- Figure 43: Investment diversification preference, November 2016
Meet the Mintropolitans
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- MinTs takes up more wealth management responsibly
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- Figure 44: Wealth management responsibility, by MinTs and Non-MinTs, November 2016
- BOC’s overseas services make it more popular among MinTs
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- 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
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- Figure 46: Interested information, MinTs versus Non-MinTs, November 2016
- MinTs show more confidence in investment
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- Figure 47: Wealth management preferences, by MinTs and Non-MinTs, November 2016
Appendix – Market Size and Forecast
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- Figure 48: Market value of retail banks and forecast, 2011-21
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Appendix – Methodology and Abbreviations
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- Methodology
- Key driver analysis methodology
- Key driver analysis results
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- 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
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- Figure 51: Key drivers of overall satisfaction with China Construction Bank, November 2016
- Fan chart forecast
- Abbreviations
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