Study On Competitive Position And Strategy Of Nationwide Joint-stock Commercial Banks

With the further development of financial system reform, China's commercial banks tend to move towards diversification, according to the classification criteria drafted by the China Banking Regulatory Commission (CBRC), this paper does its research by dividing current commercial banks in China into four categories, namely, state-owned commercial banks, joint-stock commercial banks municipal commercial banks and foreign banks. This study is mainly focused on the joint-stock commercial banks which is one of the four categories. Since the establishment in the 1980s, joint-stock commercial banks grow from nonexistence to existence, from infancy to maturity, have achieved rapid development, and have made great contribution to the development of market economy and the reform of financial system. At the same time, joint-stock commercial banks also meet bewilderments unceasingly in the development. The future development of these banks will have material impact to the reform of the financial system of China; therefore carefully research on the development of joint-stock commercial banks will be of vital significance.Based on the elaboration of competitive landscape of domestic commercial banks, this article has carried on comparison between joint-stock commercial banks and other commercial banks on characteristics, then analyzed competitive advantages and disadvantages between joint-stock commercial banks and other banks, eventually proposed strategies to enhance competitiveness of joint-stock commercial banks.First of all, the article has carried on the elaboration on the competitive landscape of commercial banks in China. By considering the classification standards CBRC, the paper divides current commercial banks into four categories, namely state-owned commercial banks, joint-stock commercial banks, municipal commercial banks and foreign banks, and also elaborates each type of commercial banks on current operation summaries. State-owned commercial banks are transformed from traditional state-owned specialized banks, which are the key component of commercial banks in China, and take a large proportion in assets and liabilities scale. Along with the government leadership policy, the state-owned commercial banks have gradually walked out of difficult position, improving operation conditions constantly. Although joint-stock system commercial banks are founded late, their development is faster and their market scale expands quicker; Municipal commercial banks are mainly composed of regional banks which are important constituent of banking industry in China, and have great influence in the area of perfecting financial service for small-and-medium-enterprises (SMEs) and urban residents, promoting local economic development. Since the reform and opening up, foreign banks gradually entering into China and after China's accession to the World Trade Organization (WTO), the development speed of foreign banks in China is in an increasing trend, the entry of foreign banks will promote the upgrading of operation level of Chinese banking industry.Afterward, the article analyzes advantages and disadvantages between joint-stock commercial banks and other banks. Comparing with the state-owned commercial banks, as joint-stock commercial banks are established later, and the scale is relatively smaller; they have competitive advantages in the operation philosophy, systems, management efficiency, as well as the quality of personnel. Based on the similar reason, joint-stock commercial banks have the competition inferiorities in the number of networks, basic customer groups and the national policies when compared with state-owned commercial banks. Comparing with the municipal commercial banks, joint-stock commercial banks have the competitive edge in the banking networks, personnel quality and reputation, but have competitive disadvantage in regulatory policies, relationship with local governments and decision-making efficiency. Comparing with foreign banks, joint-stock commercial banks have competitive advantages in banking networks, native culture, but have competitive disadvantages in management level, enterprise culture and innovation capability.Finally, the article puts forward strategies to enhance competitive power of joint-stock commercial banks. The first one is to carry out operation localization correctly, which is to carry on market localization correctly, insist on medium scale status, avoid taking the large and complete mode which belongs to state-owned commercial banks , do network distribution as economic regionalization; And is also to locate customer correctly, for public customers, take the medium size customers as the essential target customers and small size customers as supplement; for private customers, take large and medium-sized customers as the main target. The second one is to enhance innovation capability, including enhancing innovation ability of product and administration, the priority of which is to focus on customer-centric, market-oriented when carrying out product innovation and the secondary is to pay attention to the matching principle of risks and benefits and taking flat administration as direction in administration innovation. The third one is to strengthen the computerization construction, including the development and construction both internal management and external service system, the priority of which is to pay attention to form a complete computer management system during the construction process of computerization to prevent the emergence of risk; the secondary is to cultivate the talented personnel in the financial computerization field; the last one is to adhere to the direction of self-development and pay great attention to the pragmatic effect, proceeding in an orderly way. The fourth one is to strengthen the construction of enforcement. the priority of which is to pay great attention to build a enforcement cultural atmosphere, unifying the targets of all cadres and staff of the banks so that all the staff may share the same objective; the secondary is to formulate scientific strategies, operating objectives, enabling the goals to be obtained step by step; and the last is to implement necessary monitoring and incentive systems which impel every unit enhancing enforcement initiatively. The fifth one is to promote the risk management capability. In the area of credit risk prevention, including establishing the comprehensive risk management mode, perfecting information system construction, improving credit risk measure and managerial technique, and cultivating a culture of credit risk management; In the area of market risk prevention, strengthening the market risk identification and measurement level, integrating management system of market risk and strengthening market risk management methods; In the area of operation risk prevention, strengthening the staff risk consciousness, establishing cooperation mechanisms among all risk management function departments and enhancing the investigation and punishment dynamics to responsible persons. The sixth one is to adhere to the principle of people-oriented, strengthen talents engineering construction, the priority of which is to maintain a strict standard on recruitment and guarantee that only the excellent talents join the banks, the secondary is to promote staff quality through continuous training, and the last is to stimulate the potential of staff, arouse the initiative and creativity of staff and lead the staff to work hard towards the correct direction through establishing effective incentive mechanism.