Thursday, 18 July 2024

Ping An Bank pips incumbent CMB and regional peers CBA, Stanchart and DBS to emerge best retail bank in Asia

5 min read

By TABInsights

In 2020, Ping An Bank outperformed its domestic and regional retail banking peers not only in its business growth but also its technology capabilities and innovations.

  • Ping An Bank has set new benchmarks in retail transformation with its focus on AI, API and open  banking ecosystems
  • It recorded explosive growth in wealth management with a 53.8% YoY increase in AUM, crossing the RMB 1 trillion mark
  • The bank ranked first in China in the BankQuality customer net promoter survey

Ping An Bank was awarded the Best Joint Stock Retail Bank in China, Best Retail Bank in China, and Best Retail Bank in Asia Pacific in the 2021 Excellence in Retail Financial Services Awards programme. Leading Chinese banks dominated the ranking of best retail banks in Asia Pacific with four in the top ten. Australia  has two, while Hong Kong, India, Philippines and Taiwan each have one in the list of top retail banks.

Based on the evaluation scorecard, Ping An Bank excelled in digital journey, sales, customer experience, and process and technology while promoting open banking, scenario-based customer need management and the development of retail banking ecosystems.

Ping An Bank outperformed its regional peers in retail banking

Figure 1. Scorecard for Best Retail Banks in Asia Pacific

Source: TAB Research

Process and Technology: Setting new benchmarks in retail transformation

Since the launch of its retail transformation at the end of 2016, Ping An Bank has doubled its business scale and operating efficiency, with growth rates far exceeding its peers. Ping An Bank’s ascent to become the top retail bank in China and the world signals a momentous industry shift that an insurance-led and technology-driven financial conglomerate is driving some of the most impactful changes in the sector.

A strong proponent of open, integrated ecosystems, it deploys over 5,300 application programming interfaces (APIs) and artificial intelligence (AI) technology to connect more than 400,000 small and medium-sized enterprises (SMEs) to over four million customers and users of online platforms operated by the Ping An Group and its partners.

Ping An Bank developed multiple channels to contact wealth management customers to improve the management of high-quality customers in the whole life cycle of products and continued to strengthen the construction of an open-ended product platform for all products. The bank actively pushed forward business innovation including implementing the first batch of anti-epidemic special charitable trust and the first contract of property operation trust.

With such innovations, it has for the past three years surpassed the industry average by recording the highest growth in new customers, retail revenue and AUM, increasing by compound annual growth rate (CAGR) of 8.5%, 12.7% and 22.8%, respectively. Its key businesses indicators have ranked among the best of all commercial banks in China and Asia Pacific. It has become the benchmark in digital and retail transformation.

Financials and Sales: Explosive growth in wealth management

Ping An Bank had successive breakthroughs in wealth management  in 2020. Its assets under management (AUM) totalled RMB 1 trillion ($154.81 billion), an increase of 53.8% compared with end of the previous year. Affluent customers reached around 60,000, up 30.8% from 2019. In 2020, the bank registered a revenue growth of 9.4% and return on equity (ROE) of 11.9% under extremely challenging operating conditions.

China Construction Bank showed solid financial performance, deposit mobilisation and digital engagement in 2020 and was awarded Best Mega Retail Bank in China. Its net profit from retail business accounted for 60.29% of the bank’s income as its retail ROE increased to 16.21% and retail cost to income ratio (CIR) fell to 27.36%. Individual retail deposit balances exceeded RMB 10 trillion ($1.54 trillion) in the year, ranking first among the top four mega banks. The bank has now accumulated more than 700 million individual customers. One of two Chinese is a retail customer of the bank.

Bank of Beijing showed improvement in its financial performance, effective digital strategy and successful customer acquisition. It was awarded the Best City Commercial Retail Bank in China. The bank registered rapid growth in its wealth management business with AUM exceeding RMB 770 billion ($119 billion), an increase of more than RMB 60 billion ($9.3 billion) over the year. The bank's retail customer base also surpassed 20 million. The number of mobile banking users exceeded 10 million, growing by 39% as service enhancements and a revamped app contributed to a digitally active user rate of 57%. The bank also enhanced asset quality as reflected in a low retail non-performing loan ratio of 0.41% in 2020.

Like its other domestic and regional competitors such as China Merchants Bank, Commonwealth Bank of Australia (CBA) , India’s ICICI Bank and Singapore's DBS which did not make it into the top 10, Ping An Bank has embarked on a major digital and retail transformation in recent years, focusing on digitalising key customer journeys and processes, and executing to its twin core strategies of "comprehensive finance and technology empowerment". The bank will continue to take advantage of its customers, channels, technology and ecosystem resources to position itself as “a digital, ecological, and platform bank", all rolled into one.

Customer Experience and Brand: The bank ranked first in China in the BankQuality survey

In this year’s BankQuality survey, it is the top bank in China with a BankQuality Score (BQS) of 101.15. The bank also achieved high score in its response to the COVID-19 pandemic by providing retail customers online access to all its services.

The bank ranks first for having the most number of active user base in the banking industry. Users of Pocket Bank app have exceeded 100 million in 2020. Its daily active users (DAU) reached 35 million while gross merchandise volume (GMV) totalled 15 billion in the whole year.

At the end of 2020, the number of monthly active users of Pocket Bank app in life scenarios have exceeded 21 million, an increase of 79.1% compared to 2019. It represents 54.1% of the bank’s number of active users totalling over 100 million.

Digital Journey: Building the industry-leading AI banking system

Ping An Bank’s retail business continues to promote comprehensive artificial intelligence (AI), strengthen the infrastructure construction and top-level application of data platform, and boost the construction of "AI + Remote + Offline" customer management closed-loop system. The bank also keeps forging its internet gene product.

The bank was also the first to achieve 100% online operation of insurance trust business within the industry, reducing the lead time from 30 to two working days.

Ping An Bank is far ahead of the industry in active user base, revenue and expenditure analysis, wealth diagnosis, AI account manager and other financial indicators.

Risk Management: Deploying timely risk control strategies during the pandemic

Chinese banks have been affected by adverse factors such as fluctuations in the external economic environment, shrinking consumer demand and declining household income caused by the COVID-19 pandemic. The quality of retail assets experienced short-term fluctuations and the ratio of non-performing loans increased at the beginning of 2020.

In order to mitigate the impact of the pandemic, Ping An Bank used its industry-leading technological capabilities and risk control models to optimise the threshold for customer entries. It implemented differentiated risk management strategies and intensified the disposal of non-performing assets. It has also undertaken a prudent business strategy, adjusting its risk appetite to minimise its non-performing assets.


Click here to watch the awards ceremony video

Click here to see the Evaluation Criteria

Click here to see the full Retail Bank ranking

Click here to see the BankQuality Most Recommended Retail Bank ranking


Keywords: Customer Experience, Digital, Retail Banking, Fintech, Retail Transformation, Risk Management, Wealth Management, AuM, CAGR, ROE, Bank Profit, App, Online Banking
Country: China, Australia, Hong Kong, India, Taiwan
Region: Southeast Asia
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