Personal Financial Services Risk Prevention Research Of China’s Commercial Banks

Into this century, Chinese commercial banks have entered the stage of rapiddevelopment, the competitions between banks on grabbing market and customers, have tendto be more competitive. How can commercial banks gain competitiveness in the competition,one of the most critical is the transformation of traditional business profit model, and financialproducts innovation. Personal finance service is gradually developed under this background,has formed the scale, in just a few years, gain a lot more popularity. Also the kinds of productsfrom several extents to thousands of varieties, including RMB and foreign exchange assetsmanagement, financial planning, investment consulting, etc. Development has been acceptedby people, and show great potential in the future. But from another perspective, the rapiddevelopment of the personal financing service of commercial banks is not coordinated withthe degree of China’s financial market development, especially after the global financial crisis,the financial markets and global investment markets fluctuate, made a great impact on thedevelopment of personal finance services of commercial banks in China. A lot of individualwealth management products of commercial Banks suffered a credibility crisis, no earningsand big losses. Banks and supervision department faces great difficulties with risk control ofpersonal finance products also, has many problems.Thus, this article starts from the background of the commercial bank individualfinancing business development of China, this paper studies the huge potential of the personalfinancial market development in our country, combining the results of domestic and foreignscholars, summarize the problem of risk prevention and control of the personal financingbusiness, discusses the importance that risk prevention and control of personal financialmanagement business have on personal finance and commercial bank’s development; Later inthis article, from the point of view of theoretical analyse the concept and characteristics ofpersonal finance business, the paper expounds its theoretical basis, and from the macroscopicperspective elaborates the present development situation of foreign and domestic personalfinance products, further the theory basis for later discusses; Next, this article introduces thefour sorts of risks that commercial bank personal financing business are facing, that is, marketrisk, credit risk, operational risk and legal risk. By the end of the article, combining with theUnited States, Hong Kong and Japan’s experience in commercial bank risk prevention and control, give countermeasures and suggestions on the four aspects of risk control, in order toprovide theoretical support for commercial banks and investors on the risk prevention andcontrol of personal finance products.