China's Commercial Banks, Credit Card Business Risk Management Study

As a high-profit product, bank card has become the very important income resource of service business in foreign banks. Now that the income of banks' traditional business has been reduced, service business is regarded as the new profit point exploited by foreign banks. However, in recent years, many affairs on risks of credit card business occur continuously in a lot of countries. In November of 2003, Korea's credit card crisis caused a number of banks to bankrupt this business. In June of 2006, American credit card customers' information was gone out. Chinese commercial banks' credit card business annually suffer from great loss either. With the further development of Chinese credit card business and the threatening caused by furious competition of foreign banks, economists and bankers put their eyes on how to use foreign advanced experience and technologies for reference efficiently and set suitable technology system of controlling risks to promote Chinese banks' credit card business healthily develop. Therefore, it is significant of setting perfect system of risk controlling and mine high-efficient technologies to control the risks of Chinese credit card business by analyzing the causes of the business' risks.This thesis is composed of 4 parts to research risk management of commercial bank credit card business.Chapter 1 gave a summary to the development of the commercial bank credit card business, it briefly introduced the development process of the credit card business, and simply analyzed the credit card market of first half of year 2007, at the end of this part, it stated the significance of resisting the risk of credit card business.Chapter 2 gave the total analysis of the credit card business risk, it analyzed the risk formation of the commercial bank credit card business according to the credit card risk category and its characteristics, then introduced some methods which bank used to control the risk of credit card business.Chapter 3 analyzed present condition of credit card risk management. In this part, the development process and present situation of the credit card risk management were clarified; several existent problems of risk management were explained.Chapter 4 draws lessons from the credit card risk's management experience of American financial institutions, including western credit scoring technique, the personal honesty system of U.S. and the famous FICO credit scores, submitted suggestions of constructing internal control system, studying advanced risk management style and setting up personal credit scoring system to promote the management of Chinese commercial bank's credit card business.The last two parts are the core of this thesis.