Sunday, 16 June 2024

Most improved retail bank in Asia Pacific, Middle East and Africa

5 min read

By Gerald Tai

Ping An Bank has successfully transformed its operating structure into a modern one, prioritizing asset-light and capital-light structures to allow flexibility.

Ping An Bank is a national joint-stock commercial Bank headquartered in Shenzen, China. The bank is one of the three main pillars of Ping An Group: insurance, banking and investment. The bank reverse takeover publicly traded company Shenzhen Development Bank and retained the stock code of the bank in 2012.

Started from 2016, based on a thorough review of the macro and industry situation, the Bank launched a new strategy for retail transformation, strived to build a new development model for smart retail banking and promoted business operations with less capital and assets. In 2017, the Bank took the advantages of comprehensive finance, enhanced technological innovation and optimized organizational structure to deepen the transformation of retail banking business.

Leveraging comprehensive finance

Comprehensive finance, which mainly includes the bank’s retail channels and Ping An Group’s products channels, continued to demonstrate an advantage in transforming the bank’s performance. In 2017, the Bank continued to dig into the Group’s high-quality personal customer resources. It not only conducted migration and transformation through the products, services and customer referring, but also created a specific B2B2C model to integrate the Bank’s account capacity with scenario and traffic of the Group’s on-line platforms (such as Ping An Doctor, Autohome). These two measures complemented each other so that the customers of the Bank can enjoy its advantageous products and services in a more natural and convenient manner. In 2017, the number of customers migrating via comprehensive finance channels increased by over 4 million, accounting for 41.38% of the overall new customers.

Enhancing technological innovation

The Bank continued to develop Ping An Pabank App into a one-stop comprehensive financial mobile service platform. In August 2017, the bank rolled out the 4.0 version of its mobile banking app, embedding biometrics and AI advisory to provide users with customized product portfolio solution based on transaction records and risk appetites. The bank also built its intelligent risk control system based on state-of-the-art technologies, including blockchain fraud prevention and big data application strategy models.

In August 2017, the Bank launched the first pure retail store: Liuhua Branch. The pure retail outlet, was a new intelligent retail store newly designed and established by the Bank with the feature of “new image, new model and new future”. It provided hall service and one-stop retail banking service. Meanwhile, the Bank dug the potential demands of walk-in customers through big data plus AI and helped improve the efficiency of the sales and service personnel of stores to provide more intelligent, smooth and thoughtful high-quality services for customers.

Optimizing organizational structure

In 2017, the Bank comprehensively promoted the agility transformation in terms of organizations, established agility mechanism and vertical management and control coordination system featured with “head office-branch-sub-branch-front line”. In 2017, the Bank recruited 244 internet technology professionals, including 26 senior management personnel in the credit card, consumer finance, auto finance, big data platform and other fields. Meanwhile, the Bank re-planned training system to assist the transformation by regarding training as the accelerator of business development and incubator of personnel training. . It implemented the Wolf Training, Excellence Project, Pilot Project and other key projects for different groups, at different levels and by batches.

In 2017, the Bank introduced the “innovative garage” mechanism for incubating large retail innovative products, services and models. A project incubation team was established under the “innovative garage” mechanism to improve staff enthusiasm and collaboration efficiency; comments was constantly invited from front-line staff and customers in innovation process to make sure that the products incubated were close to market demands. In 2017, core projects such as new retail stores and outlets with no queue were incubated by the “innovative garage”

Peer comparison

Compared with China Merchants Bank, whose retail banking featured by wealth management, Ping An Bank’s retail transformation regard its loan business as the breakthrough, and the three major loans products are: credit cards, consumer financing (New Generation loan) and auto loan.

In 2017, The Bank took a series of initiatives such as product innovation, credit process optimization, the adequate risk measurement model and the application of big data strategy. The Bank’s cumulative new auto finance loans amounted to $18 billion (RMB118 billion), a YoY increase of 44.20% and the Bank continued to maintain its leading position in market share. At the same time, the Bank issued 15 million new credit cards were issued, an 80% YoY increase; notably, credit cards issued through the comprehensive finance increased by 189.1% year on year. Regarding to consumer finance business, the bank focused on customer needs and it took measures such as product upgrading, experience optimization and comprehensive risk control.

Retail Achievements in 2017

In a competitive landscape constantly evolving, Ping An Bank saw a promising increase in its customer base. By the end of 2017, the number of retail customers of the bank increased to over 69.9 million, a 33.43% year-on-year growth. Balance of retail deposits totaled RMB341 billion, up by 26.76% as compared to the end of last year. The Bank’s retail assets under management (AUM) reached $167 billion (RMB1,087 billion), up by 36.25% as compared with the end of last year. The balance of retail loans (including credit cards) was $130 billion (RMB849 billion), an increase of 56.95% over the end of the previous year. In 2017, the non-performing ratio of the Bank’s retail business maintained stable with a slight decline. Non-performing ratio of retail loans (including credit cards) was 1.18%, down 0.34% from the end of last year.

Ping An Bank has successfully transformed its operating structure into a modern one, prioritizing asset-light and capital-light structures to allow flexibility. The Bank has also moved towards their goal of becoming a one-stop financial platform for their customers, providing insurance products and business development services. Ping An Bank's retail business grew substantially, and realizing sound business development and benefits of the strategic transformation.

Keywords: Technology, AI, Blockchain, Retail Business, Retail Transformation, Comprehensive Finance, Techological Innovation, Optimized Organizational Structure, Financial Mobile Service, Mobile Banking, Agile Transformation, Agility Mechanism, Internet Technology, Peer Comparison, New Generation Loan, Strategic Transformation
Institution: Ping An Bank, Liuhua Branch, China Merchants Bank,
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