Recently, China Merchants Bank released his 2020 annual report with a net profit of 97.3 billion yuan a year, more than the profits of two Maotai companies, worthy of the title of "Maotai of banking".

Behind the achievements is China Merchants Bank's in-depth practice of four assault directions in the light banking strategy: unbounded organization, big wealth management, wholesale financial innovation, and digital marketing construction. Let's make a specific analysis.

Unbounded organization

China Merchants Bank focuses on adjusting the organizational structure of the retail finance headquarters.

In March 2021, China Merchants Bank abolished the Wealth Management Department, the Wealth Management Department and other departments to form the Wealth platform Department. At present, China Merchants Bank has not only sold wealth management products of China Merchants Bank and China Banking Fund, as well as wealth management products of other funds, trusts, and insurance companies, but also begun to sell wealth management products of friendly banks. This is a breakthrough. Under the general trend of the decline of Internet financial management, China Merchants Bank's strategic intention to integrate the online wealth management business of other banks is very obvious. In the future, China Merchants Bank's wealth management will cooperate deeply with China Merchants Bank's asset management and investment banks to promote marketing and product innovation.

China Merchants Bank set up a new retail strategy alliance department directly under the headquarters of retail finance, and vigorously developed customer-oriented "life circle" and "business circle" corresponding to the "big customer group" and "big ecology" strategy of China Merchants Bank's annual report. to achieve deep customer management across C-end and small B-end products and business, and to realize the mutual contribution of B-end and C-end resources. For example, China Merchants Bank has developed the "Passover Alliance" based on the life in the palm, focusing on the construction of catering, automobile and e-commerce business circles, which can not only provide C-end customers with higher-than-expected value, but also deeply support the better development of merchants in the business circle.

China Merchants Bank transferred the proprietary consumer finance business from the credit card center to the retail credit department and will work together with the Pratt & Whitney Financial Services Center.

Between the general branches and business lines, China Merchants Bank has set up many unbounded virtual project organizations for major projects, fully realizing the sharing of resources and capabilities of different organizations, realizing substantive linkage, and jointly tackling key problems in scenes, and forcefully breaking the resource restrictions imposed by the department wall.

In terms of the organizational structure of science and technology, in order to fully precipitate the capacity in the field, China Merchants Bank will continue to consolidate the construction of the four major industrial and research centers in 2020: retail application R & D center, wholesale application R & D center, infrastructure R & D center, data assets and platform R & D center.

Great wealth management

Due to the epidemic, there has been a rise in the number of bad retail loans in China Merchants Bank. In 2020, China Merchants Bank's consumer loan and non-performing loan ratio was 1.47%, up 0.29% from the end of last year, and the bad rate of credit card loans was 1.66%, up 0.29% from the end of last year.

The introduction of new regulations on Internet loans has also begun to squeeze the bubble of Internet loans, which has a significant impact on the retail loan business of commercial banks. In this case, China Merchants Bank began to vigorously develop light banking business, wealth management business, to expand non-interest income is a very natural thing. In 2020, China Merchants Bank's non-interest net income was 105.451 billion yuan, a growth rate of 9.15%, exceeding the growth rate of 6.90% of net interest income.

The wealth management sector outshines others in non-interest net income. China Merchants Bank's agency fund income was 9.434 billion yuan, an increase of 99.45% over the same period last year, and non-monetary funds sold better; agent financial income was 5.699 billion yuan, up 57.89% over the same period last year; and precious metals income was 224 million yuan, an increase of 86.67% over the same period last year. Gold trading is relatively active. The revenue of the agency trust scheme was 7.626 billion yuan, an increase of 12.58% over the same period last year. China Merchants Bank's achievement in acting as a wealth management agent is very eye-catching, not only because of the full cooperation of China Merchants Fund and China Merchants Fund, which have a strong ability to create financial products, but also because the epidemic in 2020 has comprehensively accelerated the construction of China Merchants Bank's digital platform.

In sharp contrast to the sharp increase in wealth management income against the trend, the fee income from bank cards and credit cards grew by no more than 0.2% in 2020 compared with the same period last year. China Merchants Bank achieved the growth of non-interest net income thanks to the rapid growth of wealth management business. Wealth management can not only increase the ability of banks to resist the cycle, but also precipitate deposits. In 2020, customer deposits reached 5.4 trillion yuan, an increase of 777.2 billion yuan over 2019, an all-time high.

This is also the reason why China Merchants Bank proposed "building a big wealth management system" in the 2020 annual report.

During the outbreak, China Merchants Bank put some of his offline wealth management capabilities online in order to reach 100m offline customers. China Merchants Bank APP launched the "on-screen explanation" function, which supports the ability to provide online wealth management professional consulting services to clients through text, picture and text, voice calls and other functions. The ability of online wealth management consulting services enabled China Merchants Bank account managers to deepen their online business relationships with gold card and sunflower customers in 2020, serving 9.3272 million customers, an increase of 44.77% over the same period last year, with a transaction value of 472.549 billion yuan, an increase of 319.57% over the same period last year.

China Merchants Bank launched the "Fortune accompany" function throughout the journey, covering the whole process of "pre-sale-sale-after-sale" of China Merchants Bank's APP financial management business, and developed a "financial intelligence live broadcast" function that supports tens of millions of concurrency at the same time. As soon as customers entered China Merchants Bank's APP, they began to provide customers with market hot spot analysis and asset allocation professional advice services through reminders, information and video. In 2020, Fortune accompany held 1200 "Financial Intelligence Live" on APP, with a maximum of 3.45 million viewers per show.

Corporate wealth management is China Merchants Bank's first systematic disclosure in the annual report. In 2020, China Merchants Bank held corporate wealth management forums in various regions. China Merchants Bank head office investment banking department, China Merchants Fund coordinated marketing to high-end enterprise customers, focusing on China Merchants Bank's full-chain resource integration ability, and in-depth analysis of the underlying assets. In 2020, China Merchants Bank realized 2.6 trillion yuan in sales of enterprise wealth management products, an increase of 18.77 percent over the same period last year.

Wholesale financial innovation

China Merchants Bank has made more innovations in wholesale financial loans and transaction banking services.

Among China Merchants Bank's corporate loans in 2020, the non-performing loan ratio in the leasing, wholesale and retail industries increased significantly, to 4.02% and 4.25% respectively, while the non-performing loan ratio in the manufacturing, mining and construction industries decreased significantly. Moreover, China Merchants Bank identified 16 compression and withdrawal industries: coal, coal chemical industry, coal trade, iron and steel, steel trade, basic chemical industry, mining and processing of commonly used metal ores, non-ferrous financial smelting and Calendering, shipbuilding, flat glass, marine freight, textile and chemical fiber, photovoltaic manufacturing, chemical fertilizer manufacturing, machine tools, synthetic materials manufacturing.

Through the structural adjustment of loans, China Merchants Bank makes the bad rate of B-end loans significantly lower than that in 2019. The amount of non-performing loans generated at end B was 15.081 billion yuan, down 3.274 billion yuan from the same period last year, while credit cards generated 32.441 billion yuan of non-performing loans, an increase of 13.833 billion yuan over the same period last year. And the bad rate of loans of large enterprises and small and micro enterprises is much lower than that of medium-sized enterprises. It is based on the above data that China Merchants Bank has accelerated the innovation of small and micro enterprise services.

In terms of small and micro enterprise loans, China Merchants Bank made every effort to create loan APP products, loans and non-loan services go hand in hand. In terms of loan services, China Merchants Bank defined the "31st" positioning of "channels, scenes, data" + "products". In addition to the previous business loans, lightning loan products, in 2020 China Merchants Bank newly launched the government loan 2.0, bidding loan, tax rebate loan 2.0, settlement flow loan.

In terms of non-loan services for small and micro enterprises, China Merchants Bank launched a "business exchange" in the loan recruitment APP, providing a platform for small and micro enterprises to display themselves, and establishing a social circle between small and micro enterprises. At present, it has developed food and agriculture, clothing and textile, building materials, home decoration, department store supplies, transportation, educational consulting, tourism and leisure, cultural creativity and other display channels. China Merchants Bank also made great efforts to develop payment agents, commercial ticket stickers, guarantees and other products to drive small and micro enterprises to get customers in bulk and boost the growth of deposits. At the end of 2020, the number of corporate customers with an average daily deposit of more than 500000 yuan reached 199400, an increase of 16.68 percent over the same period last year.

In addition to the loan business, the wholesale financial business also makes an eye-catching contribution to deposits, not only increasing, but also reducing the cost of interest payment.

At the end of 2020, China Merchants Bank's customer deposits totaled 5.6 trillion yuan, an increase of 16.18 percent over the end of last year, of which corporate customers' deposits were 3.59 trillion yuan, 1.59 trillion yuan more than retail customers' deposits, and only 1.2 trillion yuan more at the end of 2019. The gap between corporate customer deposits and retail customer deposits is significantly wider in 2020 than in 2019.

Moreover, the proportion of demand deposits of corporate customers increased by 6 percentage points in 2020 compared with 2019, while the proportion of time deposits of corporate customers decreased by 5 percentage points compared with 2019. Among China Merchants Bank's deposits, both company term and retail term are lower than at the end of 2019. China Merchants Bank invested a large number of troops to develop wholesale financial business, resulting in a large number of demand deposits, which greatly reduced the interest payment cost of China Merchants Bank's debts. The reduction of interest payment costs has a high technical content in it, and it is a "technical activity". This is mainly based on China Merchants Bank's "escrow +" and trading banking products.

"escrow +" has functions such as "escrow + operation outsourcing", "escrow + investment research report", "escrow + transaction settlement", "escrow + risk management" and "escrow + performance evaluation". It provides an online collaborative utility for remote escrow management during the epidemic. The investment research report, based on China Merchants Bank Research Institute and China Merchants Bank Financial Management, provides valuable research support for managers' investment comprehensively and objectively from the perspective of macro policy, industry research, micro entities and other dimensions. Performance evaluation products select excellent investment institutions for managers based on the five-dimensional model of management scale, institutional love, offensive ability, defensive ability and stability.

Relying on "trusteeship +", China Merchants Bank's trusteeship assets reached 16.1 trillion yuan in 2020, ranking second in the trusteeship industry and first in the incremental industry. The three escrow businesses of public offering funds, insurance and other bank financial management have all broken through trillion yuan. The income from custody fees was 4.215 billion yuan, an increase of 16.92% over the same period last year.

In the market segment, China Merchants Bank also began to infiltrate occupational annuity and pension fiduciary services. China Merchants Bank won the fiduciary qualification of occupational annuity in Guangdong and Zhejiang. The number of pension trustees exceeded 100 billion, an increase of 133.87% over the same period last year. According to the data of the Ministry of Human Resources and Social Affairs, in 2020, the entrusted size of pension is nearly 1.05 trillion, and that of occupational annuity is over 1 trillion. There is a lot of room for this, and the competition among banks is also very fierce.

In addition to the trusteeship business, transaction banking business is also China Merchants Bank's key area of development. Including aggregate collection, B2B to public collection, CBS and so on. In 2020, the income from settlement and settlement fees was 12.601 billion yuan, an increase of 9.95 percent over the same period last year.

Vertical B2B e-commerce, retail new economy platform and core enterprise self-built sales platform are important customers for China Merchants Bank's B2B public collection, with the collection transaction volume reaching 627.018 billion yuan, an increase of 118.27% over the same period last year. Aggregate collection aggregates Netcom, UnionPay Cloud Flash payment, Wechat facial scan payment and third-party POS payment and other channels, focusing on new economy, consumption, health care, insurance and other industries. The transaction volume of aggregate collection business is 203.6 billion yuan, an increase of 38.89% over the same period last year.

CBS is China Merchants Bank's enterprise financial management cloud platform and the core product of the trading bank. In 2020, CBS launched a new equity incentive system, as well as "CBS+ Dealer Cooperation", "CBS+ fee Control reimbursement" service program, and "Fujitong" enterprise digital salary and benefits management service. In 2020, CBS has provided financial management services to 3146 group clients.

Relying on the above-mentioned public products, China Merchants Bank strengthened his strategy on the government market in 2020 and obtained a large number of low-cost "flow funds" and "incremental funds" through the "general-to-general" docking of state ministries and ministries. It deeply infiltrated the financial, social security, public resources transactions, government companies, provident funds and other customer groups. In 2020, the number of institutional customers was 41500, an increase of 17.23% over the previous year, and the average daily deposit balance of institutional customers was 914.3 billion yuan. The contribution of the government market is amazing.

Bond issuance service is also the most proud of China Merchants Bank's institutional customer service. China Merchants Bank has covered 97.22% of the market share of the whole process of local government bond issuance by provincial issuers, an increase of nearly 20% over 2019. The bond issuance fund is a deposit of 638.873 billion yuan for China Merchants Bank.

China Merchants Bank's innovation in the field of wholesale finance has just surfaced, and the impact on the B-end market will take a long time to show. The innovation of wholesale finance is expensive, and there are a lot of internal resources to coordinate, and the demand for specialty is much greater than that of C-end, but once done, it will be able to move the star sea of industry chain finance and digital government affairs.

Digital marketing construction

As mentioned earlier, China Merchants Bank's business strategy has been very clear, big wealth management, trading bank. China Merchants Bank's financial technology strategy has not mentioned the relatively vague industry concept "ABCD", but all specific actions to promote business growth and customer value innovation, including: offline products online, digital marketing platform, three clouds. Three clouds refer to customer service cloud, public opinion cloud and visual cloud.

China Merchants Bank significantly accelerated the online development of offline products during the epidemic in 2020.

China Merchants Bank's online operation service center under the retail finance headquarters was impressive during the epidemic. Network management is not only telemarketing, but also through digital capabilities to cover all customer managers, China Merchants Bank APP, handheld life APP, network remote service equipment, third-party digital channels in every corner, unified management of online customer operations. China Merchants Bank's visual cloud provides 92 million calls for remote services a year.

Accelerate the pace of public goods on the line. China Merchants Bank has completed the online application of the top ten high-frequency business from the perspective of users, the full flow of 41 public products, and the independent application coverage of online channels of public products has reached 91.05%. 72% of the customers who promote the payment agency business use the online signature of the contract, the full process of the import letter of credit, the electronic document under the item of trade in goods, the electronic guarantee of the full deposit on the full process, and launch the "commercial ticket flash sticker" and mobile "palm bill". Through the invoice cloud to achieve online independent invoice, VAT electronic rate of 79.79%, the number of customers reached 11258. China Merchants Bank took the lead in obtaining the qualification of block chain invoicing business, with a total of 1.33 million votes in 2020. China Merchants Bank has also built an online-to-public intelligent early warning system, covering more than 90% of China's credit bond issuers' quantitative credit analysis model. The timeliness of China Merchants Bank's public opinion cloud early warning has been raised from 1 day to 1 hour.

In addition to online products, the organizational structure is also online. The offline branch opened an online branch in China Merchants Bank APP. Citizens can view business hours, discount information, peripheral service information, industry information, market analysis, key product recommendations and other information in the "online store". The close combination of online and offline is also a major feature. For all kinds of offline activities released by the "online store", such as salons, gold exhibitions, and Daifa into enterprises, members of the public can easily sign up at China Merchants Bank's APP by clicking "participate now".

In addition to the wave of online products, China Merchants Bank's digital marketing platform has also accelerated the construction, including online contactless service capability, loan marketing online platform, and experience monitoring platform to achieve full life cycle coverage of customer marketing.

In terms of online contactless service capabilities, China Merchants Bank is more focused, providing online text intelligent services and light service capabilities based on customer service cloud. Online interactive services account for 90.23%, saving more than 4000 people. Online text interaction is the main way of remote consulting service. Online intelligent autonomous services accounted for 77.23%. The average amount of electricity coming from the visual counter is 1.9541 million times a month, which highlights the substitute utility for non-cash transactions at outlets. China Merchants Bank APP intelligent customer service is directly named "Xiaozhao financial consultant" to promote the transformation to wealth business. China Merchants Bank extended the intelligent service system to the official Wechat account, Alipay service window, official QQ and other third-party channels to build online light service capability, and has gained 163 million followers from the third-party channels. China Merchants Bank has 25.9426 million fans on his official Wechat account.

China Merchants Bank's digital customer acquisition is mainly based on China Merchants Bank APP and Palm Life APP to improve the chain delivery efficiency of new customers to high net worth customers. In 2020, China Merchants Bank APP had a total of 125 million users, an increase of 27.19% over the same period last year, with 19.89% of digital debit cards and 62.82% of digital credit cards.

China Merchants Bank's loan marketing online platform, including "MGM platform", "Retail Credit Yuntuo Factory", "Suanxian Tong", "Video Live", "loan recruitment" and other tools, strongly support branch account managers to carry out online operations of small and micro loan marketing during the epidemic.

After realizing full online business coverage of products and services, China Merchants Bank made every effort to build the best experience bank in 2020, set up a bank-wide customer experience monitoring system, and changed from passive question response mode to active coverage management. regularly evaluate and optimize customers' journey in China Merchants Bank's product ecology. Retail customer experience monitoring system-"Fengling" docking in-line systems up to 27, monitoring customer experience indicators 1367. For the public customer experience monitoring system, there are 28 in-line systems and 954 customer experience indicators.

At the level of basic technology, China Merchants Bank will continue to promote the transformation of the data center into a cloud computing center in 2021, improve the technology Taiwan-API application market governance mechanism, and improve the construction of the data center framework.

The influence on the Digital Transformation of Banking Industry

China Merchants Bank is the benchmark for the development of China's banking industry, and its trend has a far-reaching impact on the development of the whole banking industry.

After passing through the epidemic, China Merchants Bank 2020 report is even more eye-catching, from which we can generally see several trends in the future banking industry:

(1) the recession of the consumer finance industry will give way to wealth management, which will become the engine of bank business growth in the future.

(2) Banks are expected to replace the Internet financial platform and become the main wealth management platform to serve retail customers in the future.

(3) the practical construction of financial technology, it must be said that the era of ABCD is over, financial technology that can promote business growth and enhance customer experience is good financial technology.

(4) Retail business, online platform integration of offline channels, offline business online, online and offline integration of customers, will become the focus of digital transformation.

(5) the public business will rise again, and it will become an important trend to create rich financial management functions, to make public business online, to integrate investment firms, and to increase the connotative value to enterprise customers.

(6) with the trusteeship business as the main battlefield, banks will compete for the low-cost capital business of digital government affairs in an all-round way.