China’s Direct Banks: Birth of a New Banking Sector

by Hua Zhang, January 5, 2015
Industry Trends


Celent estimates that there are more than 30 million potential customers for direct banking in China, and this number will surpass 60 million by 2020. Direct banks will take more than 10% market share of the retail banking industry by 2020.

Although many banks in China have set up direct banks, their models are not all the same. China Minsheng Bank aims to become a completely independent direct bank, and has adopted a purely online model, with a strategic goal of servicing long-tail markets such as low-end retail customers and micro and small enterprises. On the other hand, the Bank of Beijing has borrowed the experiences of ING Direct by adopting an online and offline model, with a core strategic goal of attracting deposits at low costs.

Major trends in China’s direct banking market include:

  • ŸDeveloping P2P lending services
  • Leveraging big data-based technologies
  • ŸDeveloping products specifically tailored to direct banking
  • ŸLaunching e-commerce platforms.

In the report China’s Direct Banks: Birth of a New Banking Sector, Celent examines the size of the market, market trends, direct banking business models, and competitive strategies.

“Celent recommends the following with regard to developing direct banks in China,” says Hua Zhang, analyst with Celent’s Asian Financial Services Group and author of the report. “Cooperate with large e-businesses, fully utilize the resources of the parent bank, differentiate their positioning, and develop offline channels.”

This report provides an overview of the direct banking market in China, including discussion of direct banking market size, market trends, direct banking business models, and strategies.

A Chinese version of the report is also available.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

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Table of Contents

Executive Summary


The Direct Banking Market in China



Direct Banking Business Model



Market Size


China’s Direct Banks



China Minsheng Bank’s Direct Bank



Alibaba and Direct Banking



Direct Bank of the Bank of Beijing



Other Direct Banks


Drivers and Challenges


Development Trends




Leveraging Celent’s Expertise



Support for Financial Institutions



Support for Vendors


Related Celent Research


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