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E-banking to Jolt Chinese Traditional Banking
Dai Xianglong, president of the People's Bank of China (PBOC), said at a forum that the first encounter of the Chinese traditional banking business will be the competition from the E-banking after China's entry into the WTO. As reported, along with the booming technology of network information, the Chinese traditional banks, which rely on the business branches and number of persons at work, are by and by being eroded by the extreme expansion of the information efficiency of the E-banking business. In countries that have developed the E-banking business on a large scale, the cutting of branches of traditional banks has already become a quite obvious trend.
According to Dai, the payment may perhaps become the basic function of a bank in the future due to the changing of its functions. In order to survive in the fierce competition the traditional banks must start offering services of basic facilities for financial and non-financial businesses for the market.
He also pointed out that the booming E-finance also challenges the system of financial control and management on such aspects as follows:
1. The supervision and control on e-finance should be adapted to the E-economy and E-commerce;
2. The international standards and cooperation on E-banking control and management are tending to be more important, and overemphasis of the special features of our own banking-business may lead to be isolated in the global financial incorporation;
3. On the condition that the depositors' interests are effectively protected, to lower reasonably the admitting qualification for banks to develop their E-finance will do good to financial institutions in reducing the costs;
4. We must strictly control the E-banking on terminating the existing E-finance business and withdrawing from the market.
Finally, Dai said that the E-finance is creating its own market demands. So it is going to be an important competitor even if it won't take the place of the current forms of financial organization on a large scale. In a word, the traditional banking will see no perspective if it fails to adapt itself to this opportunity and challenge.
By PD Online staff member Huang Ying
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