Research On The Innovation Of Small Bank Business Model

In recent years, small and medium enterprises have played an increasingly important role in the national economy with the continuous transformation and upgrading and the sustainable development of China’s economic. However, due to the risk prevention difficulties, cost control difficulties and resource allocation difficulties, the problem of financing of small and medium enterprises has become a worldwide problem. Domestic banks have been keen to fierce competition around high-end customers, but they are now making great efforts to develop the market of small and medium enterprises finance. Of course, to solve the problem of financing of small and medium enterprises is inseparable from the development of small banks which are composed mainly by city commercial banks.Facing the increasingly fierce market competition in the banking sector, on the one hand, the small banks have made rapid development, but on the other hand they have also exposed many shortcomings. The financial needs of small and medium enterprises have a large difference with the financial needs of large enterprises. Small banks must accurately grasp the focus and difficulty of the development of small and medium enterprises financial business. Only in this way, small banks and small and medium enterprises can eventually achieve a win-win situation and sustainable development. Facing the increasingly fierce competition, how to choose the right business model in order to win the competition in the market is an important strategic issue that must be considered in the process of the development of small banks.The research objective of this paper is to promote the long-term and sustainable development of the small banks by looking for the most suitable business model of those banks. This paper tries to find the present situations of small banks, and especially tries to find the problems and challenges of small banks during the developing process. On the basis of previous studies and the author’s bank experience over thirty years, this paper analyzes and draws lessons from the different business models of domestic and foreign banks by comprehensive use of multiple research methods, such as theory analysis, empirical analysis, historical research and comparison research. At the same time, the real case of XX bank is conducted in-depth discussion and analysis for the sake of finding the best business model of small banks to provide high quality financial service to the small and medium enterprises and finally to put the research findings into practice.