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Chinese Banks Embrace E-business
Chinese banks are embracing the brave new world of E-business as international competition intensifies in the most populous market in the world.
In a speech at the on-going China Finance Industry Reforms Summit 2000, Deputy Director of the Department of Payment Science and Technology of the People's Bank of China (PBOC) Liu Yongchun said that smart card has already become a focus of competition among Chinese banks. Under the coordination of PBOC, the banks has made fruitful efforts to develop a universal system of smart cards.
Smart card, also known as the electronic purse, is a major form of electronic payment. Over the past decade, major commercial banks in China have all launched smart card services. Chinese customers now use smart cards to pay for consumer goods, medical services, bills and draw and deposit cash from bank accounts.
Beijing, Shanghai and Changsha have begun experimenting with a universal smart card system, enabling citizens to use one card to obtain services from all banks and public service companies. In 1997, China's central bank PBOC released the official standards on the smart card. China has developed a set of technological standards that are compatible with those of the three biggest credit card companies in the world.
Li Juan, marketing manager of Banking (China) of Schlumberger Smart Cards and Terminals company, said at the meeting that after China's accession to the World Trade Organization (WTO), competition from foreign smart card companies will force the Chinese banks to shift from "conventional" business to "modern" business.
The Guangdong branch of the Bank of China launched the country' s first electronic banking service on cable TV network in Guangdong province in south China. This service will suit the specific needs of different customers
Byran Johnston from the international consultant company Arthur Anderson said that a revolution of information technology and electronic payment has triggered large-scale convergence and consolidation in financial sectors around the world. He said that a successful bank in the future will be a bank that creates a technological advance bank.
At present, most of the Chinese users of smart cards and credit cards are in big cities. For example, citizens in China's economic heartland Shanghai have 1.18 million credit cards.
Sources from Chinese banking sector said that in the next few years, China will invest huge sum of money to upgrade electronic networks of banks, expand technological links between banks and the corporate sectors, improve public reception of electronic payment and establish a personal credit system.
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