Selling to Banks in China: A Guide to Market Entry for Solution Providers
AbstractBeijing, China 25 April 2007
Globalization and market reform are changing the Chinese banking industry, creating substantial demand for IT solutions and opportunities for foreign and international vendors.
Foreign investment, mergers and acquisitions, and expansion by various players have created greater technology requirements for Chinese banks. International software vendors are increasingly focusing on China as a source of great demand for their products. International vendors have several advantages in the Chinese banking market, according to a new report from Celent, .
"International vendors' advantages include product maturity and ability to satisfy the future requirements of banks, while their disadvantages lie in lack of familiarity with the China market, high pricing, high cost of implementation, and lack of local customer support," says Wenli Yuan, senior analyst and author of the report. "The advantages of domestic vendors lie in their familiarity with the requirements of the China market, low pricing, and low cost of human resources, while their disadvantages include lack of foresight with regard to future customer requirements, inability to rapidly satisfy customer expectations, and inability to align with international standards."
Establishing relationships with domestic firms is a win-win strategy for international firms, according to the report. International firms and domestic firms can leverage complementary strengths to meet mutual interests. State-owned commercial banks, joint-stock commercial banks, and large and midsize commercial banks will pay greater attention to international vendors products' when selecting large systems such as core business, risk management, and treasury systems.
In this report, Celent provides advice on how international firms can cooperate with local firms in China and other international firms and highlights areas that require particular attention during project implementation. Firms that successfully implement a large project will have a strong reference for subsequent projects.
The report is 26 pages long and contains three tables. A table of contents is available online. Members of Celent's Retail Banking and Wholesale Banking research services can download the report electronically by clicking on the icon to the left. Non-members should contact firstname.lastname@example.org for more information.
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 ContentsBeijing, China 25 April 2007
|Understanding Bank Requirements||5|
|Changes in the Financial Industry in China||5|
|China's Financial Industry in Transformation||7|
|Public Listing of Financial Institutions||7|
|Foreign Investment and M&A||7|
|Deregulation Allows Banks to Enter New Markets||8|
|Alignment with International Standards||9|
|Increased Regulatory Focus on Risk Management||9|
|IT Requirements at Chinese Banks||10|
|Core Banking Systems||10|
|Risk Management Systems||11|
|Treasury Management Systems||12|
|Data Warehousing and Business Intelligence||12|
|Build In-House or Buy Foreign?||12|
|Achieving a Win-Win by Cooperating with Domestic Firms||17|
|Cooperation at the Sales Level||17|
|Cooperation at the Implementation and Maintenance Levels||18|
|Cooperation at the Capital Level||18|
|Establishing Companies in China||18|
|Cooperation with International Firms||20|
|Focus on Project Implementation||20|
|Objectivity and Methodology||24|