Ways Of Protection Of Financial Consumer Of Banking Industry In China

Banking industry is the hardest-hit area among financial consumer protection.According to authoritative studies, the universality of misdirection, the severity ofbundling sales, the variety of fees and the anomie of bank-insurance product sales ruinfinancial consumers’ basic rights and interests including right to be informed, right tofair trading and right to get access to financial service, which not only goes against theeconomic development pattern transformation, but also affects sustainabledevelopment of financial industry by shrinking financial demands. On the one hand,the economic development pattern transformation requires expanding of domesticdemands which based on consumer protection; On the other hand, domestic financialbanks are confronted with foreign capitals resulting from the liberalization of thebanking market access. Our government is requested to treat foreign banks withoutdiscrimination according to national-treatment principle in WTO commitment, whichleads to the fading of policy-supported advantages. Domestic commercial banks haveto pay more attentions to consumer protection and improve customer satisfaction inorder to expand market shares.However, the status quo of consumer protection manifests the inefficiency of current consumer protection path. The primary causes have two dimensions. Firstly,the nature of current path is individual protection which would be imitated by: highcost of right relief assumed by consumers, low dependability of financial regulationand neglect of overall power of consumers as a whole. Secondly, through empiricalanalysis, there are monopolies in banking market, which leads to consumer structuraldamages constituting the major parts of consumer damages in this industry. Therefore,current consumer protection is far from a fundamental relief for consumer damage, asmarket failure cannot be corrected by individual protection.To substantially protect financial consumers in our country, we need to shiftprotection path from individual consumer protection to structural protection whichemphasizes on the overall power of consumers. With this power, consumers are ableto transfer financial demands to punish infringers of certain banks, thus fundamentallyprotect their own rights and interests. However, to transfer financial demands meansconsumer are required to have access to services provided by an alternative bank, andsuch access shall be premised on the existence of a competitive market.For this purpose, structural protection shall be implemented via the promotion ofcompetition through competition policy. On the one hand, we shall improve the levelof competition in the market by encouraging the concentration of small andmedium-sized bank aimed at the pursuit of economies of scale, and shall promote themarketization of the interest rate; on the other hand, we shall endow customers withdetailed rights by formulating specific competition regulations which includingconsumer damage standards, well-established right for lawsuit related toanti-monopoly disputes and reduction of demand-transferring cost.