Innovation in Chinese Retail Banking Digital Channels: Internet Banking and Mobile Banking Will Be Replaced

by Hua Zhang, September 15, 2015
Industry Trends
Asia-Pacific

Abstract

Within the next 10 years, 80% of cash and 60% of credit cards in China will disappear, with mobile wallets replacing them. In 15 years, the front desk services of most small and midsize financial institutions will be performed by third parties. These channels will become smaller, more community-based, intelligent, diversified, and embedded.

In the report Innovation in Chinese Retail Banking Digital Channels: Internet Banking and Mobile Banking Will Be Replaced, Celent examines transaction trends, innovation in digital channels, and the strategies of innovative banks. 

Celent estimates that the utilization of traditional channels such as ATMs, bank cards, Internet banking, and network branches will drop by half. Bank channels will become embedded into other services and applications, and bank services such as payments, loans, and foreign exchange will all be embedded into other services and applications, such as online education and medical treatment.

Social networking will be another trend that displaces traditional banking channels. Social networking is an important access point for e-commerce, O2O, and other services. For example, Ping An’s strategy is based on “social networking finance,” which is integrated with “medical services, food, accommodation, travel and play.”

“In the future, e-commerce, O2O, social networking, and other channels of Internet firms will gradually replace the existing electronic banking channels,” says Hua Zhang, an analyst with Celent’s Asian Financial Services practice and author of the report. “For large banks, the electronification of banking channels will not be simply about moving banking services to the Internet or mobile phones, but about developing banking channels based on the characteristics of the Internet.”

This report provides an overview of digital channels in China, including discussion of digital channel innovations, banks’ strategies, and business models.

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 subsidiary of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

1

 

Key Research Questions

1

Opportunities and Challenges for Retail Banks

2

The Transformation of Bank Channels

3

Platform + Financing

5

Integration of Banking Services with Other Sectors

7

Social Networking

9

 

Banking Channels Based on WeChat, Yixin, and QQ

10

 

Community Social Networking

10

 

Financial Social Networking Sites

11

Direct Banks

13

Community Banks

15

Internet Channels

16

Conclusion

17

Leveraging Celent’s Expertise

18

 

Support for Financial Institutions

18

 

Support for Vendors

18

Related Celent Research

19

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