The development process of China's banking informatization and IT solution providers is like an American drama full of turbulence, twists and turns, with very strong drama.
From manual accounts to electronic accounts
The beginning of this big play dates back to the 1980s. Until then, the domestic banking industry remained in the manual stage. As a senior practitioner of domestic banking informatization, Kui Jiansheng has been in this industry for more than 20 years. He still clearly remembers the situation of accounting in domestic banks at that time. "In front of the bank counter, you can see the books piled high inside. Bank staff basically use an abacus for accounting and a pen for bookkeeping."
With the increasingly frequent flow of funds between the major banking industry, manual accounting and paper bills of low efficiency, errors and other problems gradually emerged.
Take the processing process of a sum of funds from Bank A to Bank B for example: Bank A needs to fill in the joint bank declaration in three copies by hand, keep one copy and send the remaining two copies to Bank B through the post office. Bank B will send one of the copies to the head office reconciliation center after verifying the correct receipt. The head office will make a card with the bank number, amount and other information. After the reconciliation period and the funds have not arrived, Bank A will send an inquiry letter, telegram or even send someone to check. At that time, the joint bank reconciliation of the People's Bank of China's head office was settled once a year, with a general delay of four or five months, and the longest time for clearing up to 19 months.
Such efficiency is obviously difficult to meet the needs of the development of domestic banking industry. Moreover, in this long process, if there is an information error, for the bank, it may cause very big losses.
After 1985, the domestic banking industry carried out the reform of enterprise-oriented operation, in which improving efficiency and reducing operational risks became one of the focuses of domestic banks, which also drove the demand for bank information construction. "Banking is an industry that runs risks, so information is very important for banks. Once information is inaccurate, it is likely to bring great risks to banks." Kui Jiansheng said.
At this point, the leaders of banks realized that without going electronic, they could not guarantee the authenticity and effectiveness of business information, and thus could not conduct effective supervision. "At that time, several major domestic banks began the information construction, but initially mainly the bank manual account into computer account, are stand-alone business system, the main purpose is to realize the automation of manual business." "Recalled Wang Shunlin, vice president of Beijing Huijin Technology Co., LTD.
In Wang's opinion, banking informatization was in its infancy at that time, the market scale was very limited, and a real industry had not yet been formed. Moreover, the equipment purchased by domestic banks is mainly foreign, and domestic companies only carry out some simple services or development. Therefore, there are no large-scale IT service providers in China, but more small regional companies.
Wang Shunlin, vice president of Beijing Huijin Technology Co., LTD
"Two days in two" era
After 1990, banks have basically completed the conversion from manual accounts to electronic accounts. However, the flow of information and data between bank branches is still not possible. An obvious example is that a customer who has opened an account at a particular outlet can only do business at that outlet.
"The unit computer operation mode, neither in the computing speed nor in the business processing power can meet the increasing business needs of the bank. Therefore, the realization of computer networking has become the urgent task of banking business development." Wang still clearly remembers that during the five or six years from 1990 to 1996, various banks in China have realized in varying degrees the collection and networking of data tables, the deposit and payment of accounting business outlets, and the deposit and withdrawal of savings business, basically establishing a large and medium-sized computer network system centered in economically developed cities.
This stage is also the first flourishing period of China's banking informatization: the big online stage. At this stage, the domestic banking industry began to make relatively large investments in hardware infrastructure, and the banking informatization market began to develop rapidly. "However, at that time, there was no concept of vars. It was mainly about backbone network building, equipment supply, etc., and more about integration services, that is, system integrators." Kui Jiansheng said.
At this stage, domestic banking service providers also got rapid development, "the surging demand for bank informatization makes large and small IT service providers spring up like bamboo shoots." "Recalled Lin Zhiguo, CTO of Beijing Gaoyang Jinxin Information Technology Co., LTD.
During this period, the most representative IT service provider of the domestic banking industry is "two days in two". The so-called "two united two days" refers to the four largest domestic enterprises in the field of banking informatization at that time: Lenovo Integration, Zhonglian, Nantian, Changtian. These four companies, can be said to be the bank of China IT vars "Huangpu military Academy". At present, almost all of the leading domestic banking IT solution providers have more or less connections with these four companies.
At that time, these four companies not only dominated the hardware integration service market, but also had strong competition in the application system market.
Lenovo Integration, for example, was founded in 1993. In 1996, Lenovo Integrated and Fushun Commercial Bank jointly developed a set of integrated business system for city commercial banks on IBM minicomm after a year of cooperation and hard work. Subsequently, after further research and development, integration and productization within Lenovo, FTS(Integrated Service System) was successfully born. Since 1998, Lenovo Integration, relying on its brand effect and armed with FTS, has successively won several projects in Shaoxing, Changsha, Wuxi, Xi 'an, Yinchuan and Weihai, and all of them have been successfully launched, creating a very good situation in the city commercial bank market.
"In 1992, China United made the core system for Chinese banks. At that time, Zoomunited mainly distributed IBM products. After domestic banks' demand for information technology, especially for core systems, increased, ZoomUnited thought it was an opportunity to develop core application systems for banks. At that time, China United had no experience in this field, so it brought in a group of architects from abroad and Hong Kong to bring in some advanced experience and methods from foreign banks. It can be said that in those years, China United's influence on the core application system of domestic banks is very big." Kui Jiansheng introduced.
Yang Huai, CTO of Beijing Huasheng Tiancheng Technology Co., LTD
The age of data centralization: The rise of the dominant group
However, the domestic bank informatization "two days" era did not last too long.
When the time pointer turned to around 2000, China's banking informatization ushered in the most important node in its development process: data concentration. It is the most important because the business, management innovation, data analysis and so on that the banking industry has done since are based on the foundation of the data set. "Without data centralization, domestic banks cannot achieve centralized management, risk control, product operation, decision support, etc. Now faced with the challenge of foreign financial giants, domestic banks will certainly be in a passive situation." Beijing Huasheng Tiancheng Technology Co., LTD. CTO Yang Huai said.
Before 2000, although China's banking informatization showed a rapid development momentum, but also gradually emerged some problems, data and information dispersion is one of the main problems. At that time, each regional bank invested in the construction of information technology. It can be said that there were as many data centers as there were branches. In addition, each branch developed the application system independently according to its own situation.
"Even the software products developed uniformly by the head office were changed beyond recognition by the provinces according to the requirements of their own business units. The most widely used savings system, international settlement system and accounting system are basically independent systems, and the data exchange between systems is mainly completed through interfaces, which not only easily cause the bottleneck of system performance, but also easily constitute a lot of information islands, and the data cannot be used and analyzed uniformly. The same information is stored in multiple places, wasting system resources; The same operation is executed many times, and the system runs inefficiently. A business operation that can be done at once is broken into several pieces and distributed in different business systems." Yang Huai analysis said.
As a result, it not only causes a large number of repeated investment and construction, but also fails to share and circulate bank information and data in a timely manner. As a result, banks cannot respond quickly to market changes based on information and data. In addition, the cost of communication and coordination between the head office and branches, branches and branches, and various departments is also very high. In addition, data and information dispersion, also to the bank's business and management has brought very big risks.
Faced with these problems, domestic banks began to seek for changes through new information construction. At this time, the maturity of network and storage technology, so that "data concentration" has the technical basis for implementation.
The large data concentration of domestic banks started from ICBC. "On the morning of November 10, 2000, Jiang Jianqing, President of the Industrial and Commercial Bank of China, personally laid the foundation stone for the infrastructure project of the Shanghai Data Center of the Industrial and Commercial Bank of China located in the Waigaoqiao Free Trade Zone in Pudong, Shanghai, which marked the substantial start-up stage of the cross-century data centralization project of the Industrial and Commercial Bank of China. The project will eventually consolidate data from ICBC's more than 40 data centers and tens of thousands of institutions across the country into two data centers in Beijing and Shanghai, and establish a unified electronic system for the whole bank. This is not only the largest, most extensive and most far-reaching project in the history of ICBC, but also the first project to build an electronic and intensive financial system in China." At that time, the China News Service telegram faithfully recorded the history of ICBC's data collection.
After ICBC started the data collection, several major banks, including China Construction Bank, Bank of Communications, Bank of China and Agricultural Bank of China, have started the construction of data collection.
The arrival of the era of large data concentration means that the domestic banking industry in the information construction of a new construction climax, and, compared with the previous, this time the investment is greater, the application is more in-depth.
However, in the last period scenery unlimited "two days", but gradually scenery is not. And the reasons for their decline are different. Some are because of division of personnel; Some because they did not catch the pace of market changes; Some are due to changes in the company itself: Nantian split in 2000, and its key members scattered to start their own businesses or go elsewhere. Lenovo integrated after several fission and business adjustment, became the later Digital China Information Service Co., LTD. And Changtian and Zhonglian, also encountered the company fission, personnel turbulence, enterprise strategy is not clear and other problems.
The decline of "two days in two" also allows other domestic IT service providers to see opportunities. In addition, after the data concentration, the pattern of the whole domestic banking service providers has also changed.
As provincial and municipal banks have lost the independent purchasing right of information construction, a large number of small and medium-sized IT service providers that originally depended on provincial and municipal banks began to encounter difficulties. And those with a certain scale, technical strength, characteristics of IT service providers began to get more projects and opportunities, and gradually become the leader of the domestic IT service providers.
Therefore, after 2000, a number of emerging IT service providers emerged in the field of banking informatization in China, including Gaoyang Technology, GaoWeida, Yuxin Hongtai, Longtop Financial, etc.
"Yuxin's rise really benefited from the big centralisation of the bank's data. The main reason was that after data centralization, banks needed to do a lot of data dedicated work, but at that time, many enterprises felt that this level of work was not enough, so they disdained this aspect of business. And Yu Xin felt this was an opportunity to undertake a large number of data conversion work. This also laid a good foundation for the later development of Yuxin. Because, after the completion of the data concentration, banks need to do a lot of data analysis, and Yuxin in the process of data concentration, every day to study the data, undoubtedly occupy the first opportunity." Ouyang Zhongcheng, senior vice president of Beijing Yuxin Yicheng Technology Co., LTD.
Lin Zhiguo, CTO of Beijing Gaoyang Jinxin Information Technology Co., LTD
The chase for capital
In 2006 and 2007, the big banks were basically in the final stages of aggregating data. At this time, the information construction of banks has entered the next stage: data analysis and business product innovation. "After the large centralization of bank data, the innovation of financial products, marketing services and business models requires the establishment of a refined management model based on data analysis and higher requirements for risk management. All these require suppliers to provide products and schemes with relatively high fit for banks." Yu Wei, chairman of Gauweida Software Co., LTD.
In this respect, compared with foreign enterprises, domestic IT service providers obviously have obvious advantages: both risk management and business product innovation have strong domestic characteristics. Foreign enterprises are not good at this aspect.
However, after data concentration, another change has also been brought about: the rapid growth of the market slowed down due to data concentration, and IT service providers are more competitive in comprehensive strength: brand, technology, talent and so on. And these, need to have a strong financial support. "In the process of data centralisation, the market is growing fast and the basic business model of each IT service provider is very similar. After data concentration, the market growth slows down, which requires the business of each IT service provider to have differentiation, to find their own core competitiveness, and the products of IT service providers should be more complete. It can be said that lower profits test the overall competitiveness of enterprises. The construction and promotion of the overall competitiveness of enterprises, no doubt cannot do without strong financial support." Wang Shunlin analysis said.
"IT can be seen that after 2006, capital in the banking industry IT service providers play an increasingly large role." "Said Kui Jiansheng.
In this case, the IT service providers of the domestic banking industry have sought the operation of the capital level, and the introduction of investment and listing became the most fashionable words in the mouth of the domestic banking service providers at that time. The subsequent development also proves that capital does play a very important role. Some enterprises that failed in listing or financing began to decline in the following years, and even a few enterprises disappeared from the market because of listing failure.
At that time, a well-known IT service provider of the banking industry in China failed to go public, but the cash flow broke and the enterprise fell into a very difficult situation. "A lot of employees are being furloughed and coming back to work with projects. The staff in the project team can get full salary, while the staff without the project at home vacation, can only get a few hundred yuan a month living expenses. At that time, the vice president of the company was paid more than 2,000 yuan a month. And after that, in the domestic banking informatization market, rarely hear the name of this company." Mr. Tian, a veteran of banking IT services for nearly 20 years, recalled.
During this period, Yuxin Yicheng and Longtop were the most representative domestic IT service providers. In 2007, Yuxin Yicheng became the first domestic financial information technology service provider listed on NASDAQ. In the same year, Longtop went public on the New York Stock Exchange, becoming the first Chinese software company to list on the NYSE.
After the successful listing, these two enterprises entered a period of rapid expansion. Through frequent acquisitions, the scale of these two enterprises expanded rapidly and gradually occupied a leading position in the market. In 2009, Longtop had more than 10,000 employees and was once the "leader" in the field of financial informatization in China.
But not for long. Shortly after trading in Longtop was suspended for financial fraud in 2011, the once-high-flying company collapsed and completely disappeared from the domestic banking IT market, while its remaining talent and market share were quickly divided up.
The collapse of Longtop also brought a warning to the IT service providers of the domestic banking industry: enterprises should not blindly pursue big and fast, and how to improve the management level, anti-risk ability and core competitiveness of enterprises is the key to sustainable survival. Therefore, after 2011, the development of IT service providers in domestic banking industry entered a period of adjustment. At this stage, the development speed of IT service providers in the domestic banking industry slowed down compared with before, and enterprises put more energy on the improvement of management level, technology and product innovation, internal integration and other aspects.
Yu Wei, chairman of Gao Wei Software Co. LTD
Missing protagonist
IT can be seen that the development of banking informatization and IT service providers in the past 20 years is no less impressive than any other drama. But if the whole development process is combed and summarized, it will be found: the lack of real protagonists. From the initial "two days", to the later group and rise, and then to the short glory of Southeast Rongtong, and after Yu Xin Yi Cheng. The leaders of the domestic banking industry have been in constant flux, so to speak, and there has never been a real protagonist. From the market situation in recent years, although Yuxin Yicheng become the leader, but the advantage is not big. Taking the data reported by IDC in 2012 as an example, the market share of Yuxin Yicheng was 5.4%, that of Digital China was 5.0% and that of IBM was 4.6%. Moreover, the top three have a combined market share of only 15%, while the top ten have a combined market share of only around 30%. The rest of the smaller companies that don't rank in the rankings have a combined market share of 70%. This also shows that the whole Chinese bank information market still presents the situation of decentralization and lack of real scale enterprises. "Under the huge scale of China's financial IT service industry, there has never been a lasting and stable pattern, continuous expansion of scale, and has absolute appeal in the industry leading brand birth." Lin Zhiguo said.
This has also become a hidden pain in the development of China's banking vars: there has never been a "super vars" with real scale and leadership. Even the current leading domestic vars, Yuxin Yicheng, have an annual income of only about RMB 700 million. Not only with the European and American counterparts far away, even compared with other domestic informatization level leading industries, there is a certain gap. For example, in the telecommunications industry, there were companies such as Huawei and Asiainfo. And in the government industry, Taiji Computer Co., Ltd. revenue also reached nearly 3 billion yuan scale.
Is it because the size of the banking information market is not enough? Apparently not. According to IDC report, in 2012, the scale of IT solution market in China's banking industry alone reached 12.1 billion yuan; In 2012, the total IT investment of Bank of China reached 66.96 billion yuan. This is undoubtedly a very large market.
So, what is the reason why Chinese banking planners have not been able to achieve qualitative leaps?
The inevitable "split"
In the journalists' interviews with the domestic banking providers, almost all regard "fragmentation" as the biggest problem that the domestic banking providers have been unable to grow stronger.
Indeed, this has almost become the law of the development of IT service providers in the domestic banking industry: when the enterprise develops to a certain stage and scale, the "personnel split" will come as expected, causing the enterprise to suffer heavy losses, and some enterprises even get down after a fall. Indeed, splintering happens occasionally in other industries, but rarely as frequently as in banking solutions.
Some people think that the reason why the division of banking providers is so frequent is related to the characteristics of banking informatization. "The threshold of banking informatization is relatively high, so it gathers many high-end talents and industry elites. A crowd of elites means it's hard to manage. This is not obvious in the start-up period, when the enterprise is small. However, when the enterprise develops to a certain stage, there will be friction and differences among these elites, and once the opinions or ideas cannot be unified, split will become the final choice." Industry veteran Mr. Tian so analysis way.
Tian has a point. But in fact, the staff split is just a superficial phenomenon, the deeper reason comes from the banking IT solution providers themselves.
What has the banking service been doing these years?
IT can be said that in the past two decades, the rapid development of domestic banking informatization has provided a good growth soil for domestic banking IT service providers, but at the same time, they have been infected with some "sinking Ke".
"Put projects first and only look at immediate benefits; Lack of attention to research and development team, no core products and technologies; The company's business is unclear and lack of core competitiveness; It's all about scale, it's about headcount, but it's not cohesive." Li Tianyuan, who has served several domestic banking IT service providers, pointedly pointed out the "four major problems" of domestic banking IT service providers.
For these problems, domestic banking providers also feel helpless. Most of the domestic banking solutions started from hardware equipment supply and system integration. Although they have been transformed into application system development later, on the whole, homogenization competition is serious and they lack unique core competitiveness. Especially after the data concentration, the growth rate of the industry slows down, and the profit of the project also begins to decline, which makes the competition between the IT solution providers of the domestic banking industry into the white heat.
In this case, banking vars are trapped in a vicious circle. Due to the lack of sufficient profit space, it is difficult for the company to ensure continuous investment in technology and products. The business cannot be effectively precipitated and accumulated, and it is difficult to maintain even improvement, let alone innovation. Therefore, it can not deeply meet customer needs, bring greater value to customers and industry development, and can not really establish its own core competitiveness. Due to the lack of competitive products or core technologies, enterprises are forced to choose the service-oriented business model and gradually become IT personnel outsourcers. It is accompanied by the weakening of the bargaining power with customers, as well as the vicious competition caused by the price war, resulting in the continuous decline of the company's profit rate and high requirements for cost control, which undoubtedly makes the company's operation into a vicious circle.
In addition, faced with the pressure of short-term benefits and the vision of long-term development, the vast majority of companies choose to become bigger or stronger first. Therefore, a confusing phenomenon appears in the banking IT service providers: The rapid development in the early stage is not difficult. Many enterprises rise rapidly, expand and occupy a good market share, but when the scale of enterprises develops to a certain extent, it is no longer difficult to break through the bottleneck. Enterprises with better internal management problems can barely support, but if the management ability is not strong, the enterprise will easily go downhill, or even into the situation of division and disintegration.
"In the face of financial IT this huge market cake, more enterprises choose to be bigger rather than stronger, more realistic immediate profits and give up painstakingly studying the long-term management of products, so that the industry of enterprises generally exist short-sighted, profit-seeking, complex business, rapid expansion, professional is not strong, lack of real core competitiveness and many other problems, "It is natural that leading brands are having hard times." Lin Zhiguo said.
In Yu Wei's opinion, in the past few years, the biggest problem of IT service providers in the domestic banking industry is that they have not kept up with the progress of domestic banks. "In the past decade, the progress of the domestic banking industry is very fast, the growth of vision, market competitiveness, so that domestic banks in the business and information construction of continuous innovation, change. However, domestic IT service providers too pursue capitalization, too pursue the rapid expansion and development of enterprises, ignore the improvement of the internal management level of enterprises, ignore the investment in technology research and development, ignore the accumulation and introduction of talents, therefore, when bank users choose IT service providers, Pay more attention to the comprehensive strength of service providers, successful cases and the degree of investment in technology, research and development, personnel and other aspects. This is one of the reasons why major domestic banks are withdrawing their projects and choosing to develop them themselves.
"There is a lot of demand in the banking sector that can be tapped, and what on earth are domestic IT companies catering to the financial sector doing? IT is a question whether IT service companies are really taking into account the needs of the customers in the name of service. As early as 2008, Yun Mingqing, then chief information officer of Huaxia Bank, raised such doubts about the IT service providers of the domestic banking sector, and now it seems that his doubts have a point.
Capital is a double-edged sword
In the development process of IT service providers in China's banking industry, capital has always played a very important role: especially with the successful listing of some enterprises and rapid development, the pursuit of capital for IT service providers in the banking industry has reached a fever level: many enterprises regard listing as the most important goal in the development of enterprises.
In addition, it has become a popular practice among domestic banking providers to acquire scale and market share through rapid mergers and acquisitions after the listed enterprises have sufficient financial support.
However, although capital can bring great help to the development of enterprises, if blindly chasing capital, enterprises are easy to become victims of capital.
"Capital is important, but companies need to recognise that capital is always a double-edged sword. Companies need to learn how to make the most efficient use of capital, but don't become its captives." Yu Wei said frankly.
Wang believes that many domestic companies have been seeking to go public, but have strayed from the purpose of listing. "Listing financing is not to collect money, but to enable enterprises to get better conditions for development through the operation of the capital market."
In fact, not only IT service providers in the banking industry, but also many domestic IT service providers have a common problem: the money from the capital market circle is regarded as payment for goods, as working capital, but it is not really used to help enterprises strengthen their core business and build their core competitiveness. Some enterprises have not even made their own business stable and strong seeking capital market returns, the result is not difficult to imagine: hasty listing, and then failed.
The pain of productization
Most IT vars in the domestic banking industry start from projects, so the operation mode they choose is basically cost-oriented service-oriented mode: that is, enterprises send technical teams to develop customized software or implement system projects according to customers' needs. Due to the huge market space of banking informatization demand, this mode determines that enterprises guided by this mode can develop and grow rapidly. However, this relatively extensive approach will face some problems when the scale of enterprises reaches a certain extent: The labor cost increases year by year, the business expansion ability of the enterprise is limited, the bargaining power for customers is declining, the core competitiveness of the enterprise is weakening day by day, and the irreconcilable contradiction between cost compression and delivery quality cannot be solved.
"Lower prices due to competition and rising costs for businesses are creating a red sea for the industry, and for individual workers, their own career prospects are very worrying. As a company, we have changed from a financial IT company to an IT outsourcing service company. Lin Zhiguo analysis way.
Relatively speaking, product oriented is a more refined business model. In this mode, the realization of enterprise value comes from the market recognition and coverage of products. However, the profit cycle of the product model is much longer than that of the service model, so the enterprise needs to have continuous investment in research and development, at the same time, it needs to have a very deep understanding of the industry, and has certain risks. In Lin Zhiguo's opinion, this is a road full of hardships to adhere to, a great test for enterprises, but for enterprises to win strong competitiveness and irreplaceable market position of powerful weapons. "However, IT is a great pity that very few IT companies in the banking IT field can really make excellent products recognized by customers, which can be replicated and promoted and occupy a large market share."
The space for vars shrinks
In addition to the problems of IT vars themselves, changes from the bank users also make the situation of domestic IT vars worse. "From the current IT construction of several major domestic banks, independent development is indeed more and more obvious, which makes the survival situation of domestic IT solutions more severe." Yang said. It is reported that several major domestic banks have very clear requirements for the independent research and development rate of the project, must reach the specified proportion. Once a project is 100 percent self-developed, the project will not be purchased.
Indeed, due to the increasingly important role of informatization for banks, domestic banks have regarded information system as a core production tool. Therefore, banks want to completely control the information system in their own hands, so that they feel more secure and reliable. At present, the development team of ICBC has more than 5,000 people, and the development team of China Construction Bank has more than 3,000 people, which can be regarded as a large software company. Moreover, due to the current profit of domestic banks is very high, so the treatment is also very attractive, attracting a lot of excellent talents to join the bank's development team.
In this case, in order to ensure the performance of the enterprise, IT vars gradually change from the original "turnkey" mode to the "head-selling" mode: that is, according to the requirements of the bank, for each service personnel, the bank will pay 20,000 to 50,000 yuan to the IT vars. "This model of 'selling heads' makes IT solution providers become human outsourcing companies, which is very bad for IT service providers to improve their technology and innovation capabilities." Yang Huai analyzed the way.
Although many IT solution providers are aware of the evils of this "head selling" approach, in order to maintain the survival of the enterprise, they have to drink the "chronic poisoned wine."
Although there are some problems, but for the domestic banking informatization market, IT still needs the birth of a real protagonist in the domestic IT service provider group. This is not only the needs of domestic bank users, but also the needs of the sustainable development of the whole banking service community. So, who is likely to become the banking information market, the protagonist of the future?
In fact, the domestic banking informatization market is never short of opportunities. Now, with the advent of a new round of bank reform, new opportunities are presented to each IT service provider.
Yu Wei admits that he never thinks the market of IT solution providers in the domestic banking industry is getting smaller. "I think there are more and more opportunities. The broadening of customers' horizons and the seeking for new changes in business provide more opportunities for domestic IT service providers."
Internet finance impacts traditional banking industry
The rise of Internet finance is one of the important opportunities for domestic IT vars in the next stage, according to Yu Wei.
Indeed, online payment, buying insurance online, financing through loans on online platforms... These businesses, which were unthinkable to many people ten years ago, have now become reality, and these are the operation mode of Internet finance, which is quietly challenging the traditional banking business.
"Internet finance refers to an emerging financial service model that realizes capital financing, payment and information intermediary by means of Internet technology and mobile communication technology. It includes three basic forms of enterprise organization: new small loan companies, third-party payment companies and financial intermediary companies. Electronic banking, online banking and mobile banking, which are widely promoted by commercial banks at present, also belong to this category. "Internet finance will develop into a third financial model that is different from both indirect financing by commercial banks and direct financing in the stock and bond markets." In Wang's opinion, Internet finance will have a profound impact on the competitive behavior of traditional commercial banks through its unique advantages, "It is even possible to change the lending mode with the Internet thought and technology, and rebuild the future financial system of the whole society. Huijin Technology has made strategic deployment for the arrival of the Internet finance era, has launched mobile financial platform, wechat banking and other solutions, and carried out research in the application of big data in the financial industry precision marketing and other aspects."
Under the impact of Internet finance, domestic banks are bound to make changes. In fact, since the emergence of new Internet financial products such as "Alipay" and "Yu 'e Bao", some commercial banks with a sensitive sense of smell have begun to snatch the "financial entrance". According to public data, Industrial and Commercial Bank of China (ICBC) is an electronic bank mainly relying on the Internet, and its business replacement rate has exceeded 70 percent. Bank of Communications has more than 76 percent of its e-banking turnover, and less than 30 percent of its business is handled manually, compared with 50 percent three years ago. Even, some banks have set their eyes on the "wechat platform" and launched wechat Bank.
The changes in the banking industry and bank users undoubtedly provide new market opportunities for IT vars. However, compared with before, banks' new market demand for IT vars is also very different. Domestic IT vars need to think: What services can domestic banks provide in the process of Internet finance? How to help domestic bank users innovate in Internet financial products?
Interest rate liberalization intensifies bank competition
On July 20, 2013, the People's Bank of China fully deregulated the lending rates of financial institutions. The floor of 0.7 times the lending rate for financial institutions will be abolished and the lending rate will be determined independently by financial institutions in accordance with commercial principles. Next, the more revolutionary "deposit rate liberalization" will be put on the agenda.
"Once deposit rates, which are the main source of income, are liberalized, banks' interest margins will narrow further, which will lead to increased competition among banks, and the pressure on banks will really start." Yang Huai said.
Indeed, interest rate liberalization will lead to a significant increase in the interest rate risk of the banking sector. Changes in interest rates pose risks to a bank's financial position and affect its earnings by changing its net interest income and other interest rate sensitive income. It also affects the intrinsic value of its assets, liabilities and off-balance sheet instruments.
In addition, interest rate liberalization also increases the probability of bank bankruptcy. From the situation of the implementation of interest rate liberalization in the world, it is often accompanied by the merger and reorganization of some banks and even bankruptcy.
In this case, in order to enhance market competitiveness, banks will inevitably pay more attention to product innovation and management level improvement, which also means greater investment in IT construction.
"IT is fair to say that the market demand is huge, but the question is whether the capacity of domestic banking IT service providers can keep up?" In Yu Wei's opinion, capacity building is always the first priority for the development of domestic bank vars. The capabilities mentioned by Yu Wei include: technical capabilities, financial capabilities, talent capabilities, management capabilities and the ability to understand customers' business.
Unfortunately, in the past decade, many domestic banking planners focused more on capital and rapid expansion, and were busy grabbing territory and market, rather than building and cultivating basic capacity.
"Yuxin Yicheng will take the basic research as one of the most important work, in-depth study of the standard of bank data model, and guide the construction of bank IT through the basic research." In Ouyang's opinion, only basic research can bring real changes to the IT application of China's banking industry and make Yuxin Yicheng stand out from the competition.
Perhaps it is time for domestic banking planners to take a fresh look at themselves: to see where they are lacking and to fix their weaknesses as soon as possible; In the products and services to do better, to create their own unique core competitiveness.
Otherwise, in the coming round of reform of China's banking industry, some enterprises will not only miss the "leading role", but also gradually from the "supporting role" to the "lone role", until disappear from the development of banking informatization drama.
As the market leader and representative enterprise in the domestic banking solutions, the growth and development experience of Yuxin Yicheng Company has been concerned by the industry. How will Yuxin Yicheng maintain its leading position in the competitive market? What is the plan for the next stage of development? For the next few years, the development of the pattern of domestic bank vars, what is your judgment? With these questions, this reporter to Yuxin Yicheng Company senior vice president Ouyang Zhongcheng conducted an exclusive interview.
Keep up with the pace of changes in industry hot spots
Since 2011, Beijing Yuxin Yicheng Technology Co., LTD. (hereinafter referred to as Yuxin Yicheng) has ranked first for three consecutive years in the ranking of IT solution providers in China's banking industry by revenue and market share published by IDC. This is no easy feat in such a competitive banking IT market. In 2000, the era of data concentration rose rapidly; In 2007, IT became the first domestic IT service provider in the financial industry to be listed on NASDAQ. After going public, the company quickly expanded its size through numerous acquisitions; In 2012, it delisted from Nasdaq and went private. It can be said that the development road of Yuxin Yicheng is quite tortuous, among which there are many key turning points. Recently, our reporter had an exclusive interview with Ouyang Zhongcheng, senior vice president of Yuxin Yicheng, who gave a systematic description of the development process of IT solution providers in China's banking industry and the development experience of Yuxin Yicheng.
Usoft: At the end of 2012, Yuxin Yicheng delisted from NASDAQ, which caused a lot of speculation in the industry. Then what was the real reason for delisting?
Ouyang Zhongcheng: This is mainly related to the situation of the US capital market. Only one year after Yuxin Yicheng was listed in the United States, the global financial crisis broke out. Then in 2011, China Concept stock fraud caused a collective decline of China Concept stock, making the price/earnings ratio of Yuxin Yicheng in the United States capital market has been greatly discounted, and its value has been seriously undervalued, which has brought great negative impact on the development of the enterprise. At the same time, China's capital market is booming, and the country continues to introduce relevant proactive policies to encourage high-quality enterprises like Yuxin Yicheng to return. After more than half a year of continuous research, discussion and careful consideration, the company decided to delist from the US capital market, in order to improve the competitiveness of the company more quickly.
Sofxin: Since the data concentration in 2000, Yuxin Yicheng has maintained the momentum of rapid development. What has played a supporting role in this?
Ouyang Zhongcheng: I think it is the ability to grasp the market hot spots and opportunities. We can see that in the past ten years, the construction hotspot of bank informatization has been changing, and many enterprises have been gradually marginalized because they failed to keep up with the pace of change. In the process of hot changes in banking informatization in the last decade, Yuxin Yicheng has seized the opportunities in time: for example, data management in large data sets, the rise of channel business and the electronization of bank transactions have all become the driving force for the rapid development of Yuxin Yicheng.
Usoft: In 2007, Yuxin Yicheng was listed on NASDAQ. What changes did it bring to the development of the company?
Ouyang Zhongcheng: The successful listing in 2007 is of milestone significance for the development of Yuxin Yicheng. It can be said that the listing has laid the foundation for the rapid development of Yuxin Yicheng in recent years, as well as making the company's brand bigger and stronger. First of all, after going public, the company obtained sufficient funds, and basically completed the planning and construction of the financial product system through a series of measures such as research and development, acquisition and integration. Now it has become one of the few domestic banking industry providers that can provide one-stop services for the whole line of products. At the same time, our service system is increasingly perfect. In the past two years, the company has made great progress in testing services and operation and maintenance services. It should be said that the company's development in recent years also benefits from the recognition and support of customers. In recent years, the scope of the company's customers has been further expanded, and it has been able to establish long-term cooperative strategic relations with more high-quality customers, especially regional banks and foreign banks.
Usoft: Talents are one of the most important core competitiveness for software enterprises. How does Yuxin Yicheng attract and retain talents?
Ouyang Zhongcheng: Yuxin Yicheng has always attached great importance to excellent talents. Moreover, since the establishment of the company, it has always adhered to an open and fair attitude, and constantly attracted excellent talents to join the company. At the same time, for the learning and growth of talents, Yuxin Yicheng has also established a complete set of staff training system and development plan, through the Yuxin Yicheng Project Management School and business management school and a variety of training courses; Provide all-round and multi-channel career development platform for employees through grade system construction and core talent development planning, and create professional learning environment tailored for different groups; Establish an attractive salary system and welfare system; Provide excellent talents with opportunities for continuous improvement and development, so that every employee can continue to grow, and realize the joint growth of employees and the enterprise.
Usoft: In recent years, Yushin has made many mergers and acquisitions. What are the criteria for Yushin to select merger targets?
Ouyang Zhongcheng: M&A is indeed one of the important development ways of Yuxin Yicheng. Through M&A, the scale, product line and market share of Yuxin Yicheng have achieved rapid growth. In the field of bank IT services, the acquisition objects of Yuxin Yicheng generally fall into two categories: one is the enterprise with very good market ability and relationship, but lack of overall business ability and qualification. The other type is those in the professional and technical aspects are very outstanding, but limited to the size of capital and management ability, can not be independently big potential enterprises.
Usoft: What are the new strategic plans of Yuxin Yicheng?
Ouyang Zhongcheng: First of all, while maintaining continuous income, we should strengthen the product concept and system, re-understand and adjust the entire product system, and improve the standardization of existing products. At the same time, in each existing product line, we should use new technology to expand new business directions, develop market-leading next-generation product series, and further expand our product advantages. On the basis of existing products and services to develop more in line with customer needs of the extension of products. To this end, the company set up a special product planning committee, to comb each product line. At the same time, the company strengthens channel integration and innovation, realizes the connectivity and integration of various service channels such as bank mobile device terminals, service terminals, tellers, call centers and online banking, and increases the investment in mobile finance.
Secondly, with the goal of productized service, we should improve our competitive advantage, strengthen our service ability and customer response speed, strengthen the construction of the operation system, improve the level of customer service, and do a solid job in long-term customer service.
Usoft: In the current increasingly fierce market competition, how does Yuxin Yicheng ensure stable profits?
Ouyang Zhongcheng: Indeed, based on the existing software product and service market in China, the scale effect of software companies is very limited, and as the scale of enterprises becomes larger and larger, we have to think about how to improve the profitability of the company. On the one hand, in terms of operation and management, it is necessary to continuously improve and enhance management efficiency to reduce the operating costs of enterprises. On the other hand, in terms of profit model, we should consider how to make use of our own advantages, including customer relationship and software capability, to create more profits. Over the past year, we've been looking at how we can integrate our software into some of our financial devices and make these small products into big applications, hoping that these new businesses will lead to explosive growth for the company. For example, this year, Yuxin Yicheng entered the financial hardware equipment manufacturing field through acquisition, hoping to realize the integration of software and financial equipment, and realize the value added of products.
Usoft: Many domestic vars are trying to consult high-end business of banks, but the effect seems to have been unsatisfactory. What is the reason?
Ouyang Zhongcheng: Pure high-end consulting business, Yuxin Yicheng also tried, but now basically no longer involved. There are two main reasons. One is customer trust. Large domestic bank users have little trust in domestic solution providers, so they are more willing to choose international manufacturers to provide consulting services for them. Second, domestic IT solution providers are better at doing practical projects, but lack in consulting theories and methods. At present, we also have a consulting business, but combined with sales and implementation, it is not simply consulting, but to make users' projects better.
Usoft: How do you view the development of domestic bank vars in the next few years?
Ouyang Zhongcheng: At present, the development of domestic banking providers has entered the integration period. In the next two to three years, the banking providers will show a trend of rapid concentration. In this round of concentration, scale, capital and comprehensive strength will play a very important role, because in terms of bank customers, R&D and innovation of new products, and attracting high-end talents, enterprises all need sufficient strength and capital as support. Small and medium-sized companies lack investment, opportunities will be less and less, the final result must be mergers and acquisitions or eliminated.
