Core Banking Solutions for Small and Midsize Banks in China: 2013 Update

by Hua Zhang, November 25, 2013
Asia-Pacific

Abstract

During 2011-2013, all four of China’s state-owned commercial banks, 40% of joint-stock banks, and more than 20 city banks upgraded or changed their core systems.

Competition among banks has become fierce. Most banks are trying to gain competitive advantage by differentiating and innovating. In addition to traditional trends such as improving risk management and optimizing payment services, banks were hoping that core systems would see some breakthroughs in areas such as Internet banking, liberalization of interest rates, and small and microloans. In the report Core Banking Solutions for Small and Midsize Banks in China: 2013 Update, Celent examines the reasons for upgrading, core banking IT spending, SaaS core banking applications, and other trends.

“There are 100+ city banks in China, and many of them are newly established. The IT infrastructure of city banks is very weak,” says Hua Zhang, Analyst with Celent’s Asian Financial Services Group and author of the report. “Fifteen city commercial banks in Shandong province formed an alliance to build a SaaS-based model core banking system that provides services such as data operation and maintenance and payments settlement.”

This report provides an overview of China’s core banking market, profiles the new core banking cases, and discusses how the new systems are supporting banks’ business strategies.

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].

Media Contacts

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Michele Pace
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Europe (London)
Chris Williams
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Asia (Tokyo)
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Table of Contents

Executive Summary

1

The Four Major State-Owned Commercial Banks

2

 

The Bank of China

2

 

The Industrial and Commercial Bank of China

2

 

The Agricultural Bank of China

3

 

China Construction Bank

3

Joint-Stock Commercial Bank

5

 

China Minsheng Bank

5

 

Ping An Bank

6

 

China Resources Bank

7

City Commercial Banks

8

 

The Bank of Hinzhang

9

 

Bank of Jining

9

Developments in Main Vendors

10

New Trends of Core Systems

11

 

Internet Finance

11

 

Interest Rate Liberalization

11

 

Small Loans and Microloans

11

 

Small and Medium Banks Join Together to Construct Core Systems

12

Conclusions

13

Leveraging Celent’s Expertise

14

 

Support for Financial Institutions

14

 

Support for Vendors

14

Related Celent Research

15

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