China Focus: China opens first direct bank
BEIJING, Sep 21, 2013 (Xinhua via COMTEX) --
The Bank of Beijing began China's
first direct bank operation on Wednesday, a novel mode predicted to
preponderate in the era of online banking.
Cooperating with the Netherlands-based ING Group, the Bank of
Beijing has initially launched direct bank services in cities of
Beijing, Xi'an and Jinan, said Shi Zhan, a senior manager at the Bank
A new mode that has proven popular in the European and U.S.
markets, direct banking does not rely on entity outlets, instead
offering financial products and services mainly via the Internet,
telephones and ATMs.
The direct banking services operated by the Bank of Beijing will
mainly serve retail clients and small and micro enterprises,
according to Shi.
Industry observers say direct banking has been a much anticipated
phenomenon in China, which has observed a surging popularity of
online and telephone banking in recent years.
Unlike online and telephone banking systems that offer limited
services, direct banks operate almost all kinds of services provided
by traditional bank outlets.
Experts say the strength of direct banking lies in its lower
operation costs, greater efficiency and its focus on serving small
and micro-sized companies, which have long had difficulties in
securing loans from conventional financial channels.
"A direct bank operates no branch network, so it runs on lower
costs. In return, it can offer higher rates of return for customers
and enjoy greater competitiveness," Tang Jianwei, a financial analyst
with the Bank of Communications, told Xinhua in an interview.
Some industry observers also praise the opening of direct banks as
vital for boosting banks' presence in the online financial markets
against the inroads made by competing e-commerce companies.
On Monday, Chinese e-commerce giant Alibaba Group announced it
would develop its direct banking services by teaming up with China
Expected to start operating in October, the service will
capitalize on Alibaba's success in the e-commerce sector, including
its popular online shopping platform Taobao. Its bank accounts will
be linked to Alipay, China's largest e-payment provider, said Lin
Yunshan, assistant president of China Minsheng Bank.
"New financial platforms built by e-commerce companies are like
uninvited guests into the territory claimed by the banking sector,
and banks need to reflect on their survival modes in the Internet
era, including by establishing direct banks," said Yang Zaiping, vice
head of the China Banking Association.
In a report issued last week, Luo Xi, vice president of the
Industrial and Commercial Bank of China, said China's commercial
banks indeed face the danger of being marginalized amid the country's
To survive, they should accelerate information building, make more
products available online and provide easily accessible services for
small and micro enterprises, Luo said.
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