Research On Financial Competitiveness Of Commercial Bank Based On Financial Ethics

BackgroundThe traditional commercial banking financial-competitiveness evaluation model regards commercial banks as individual and closed entities, by using financial indicators to evaluate the competitiveness. However, the model ignores essential business ethics, which can create bottlenecks in commercial banking development. With the development of the economy, corporate ethics issues such as social benefits, human resources, fair promotion standards, and transparency are becoming more and more important. It’s more important than ever for companies to consider ethics in their management strategies.Studies ethics in the financial industry originated in the1990’s with the opening of the first stock exchange market. Companies involved in financial scandals deeply harmed the interests of investors and greatly decreased confidence in the market. Investors recognized the need for proper guidance and creation of values and ethics in the finance sector. The Eighteenth National Congress of the Communist Party of China also recognized that establishing ethics standards were necessary for further development of the economy, with particular emphasis on the ethical problems in the financial field.The banking sector is an especially important part of the financial industry as it plays a vital role in corporate and social responsibility and the regulation of the national economy. Additionally it is responsible for the reform of the financial system by promoting market-oriented interest rates that may result in the reduction of banking profits. With the opening of the banking industry, an increasing number of foreign banks will enter the market. The rapid development of Internet banking and an increase in private capital will make create competition in the banking sector. Therefore, research on financial ethics creates important theoretical and practical value for the creating financial competitiveness in commercial banking. PurposeThe primary purpose of this study is to analyze, summarize and draw conclusions from the available literature on financial ethics about the factors affecting the competitiveness of commercial banks. The results support suggestions on how to increase competition in the commercial banking sector and by means of financial ethics.A second purpose of this study is to create a model that evaluates the effect of financial ethics on commercial banking based on data taken from Chengdu Bank. This will serve as a real world example of how the application of financial ethics can improve competitiveness with quantifiable results. I hope that results from this study can play a guiding role on future financial competitiveness evaluation.Main context and viewThe main contents can be divided into the following sections:The first chapter is an introduction to the study, mainly on four issues:First, the background and significance of this study. The second is the idea of this study, the third is the methodology used in this study, and the fourth is a listing of contributions and the shortcomings of this study. The main purpose of this chapter is to introduce the background of the study and the overall structure of this paper.The second chapter is a literature review. This chapter will serve as a review of financial ethics and financial competitiveness in two parts. The first part mainly focuses on summarizing the current development of financial ethics and defines financial concepts. Then, it summarizes the financial competitiveness findings from domestic and foreign scholars, defines financial competitiveness and analyzes the current status of financial competitiveness of commercial banks which sets the foundation for this study. The last part summarizes the whole chapter and gives research direction for this study. This chapter and the third chapter are the theoretical basis and theoretical preparation for the whole study.The third chapter is a theoretical analysis which is based on the perspective of financial ethics in researching the competitiveness of commercial banks. The first section, starting with the research foundations of commercial banking financial competitiveness on financial ethics, and regards that financial ethical theory financial competitiveness theory, stakeholder theory reason and driving factors of promoting the commercial banks financial competitiveness. The second section mainly focus on mechanism analysis how financial ethic affect the competitiveness of commercial bank, using embedding theory, barriers theory and identify theory to explain how financial ethic improve the financial competitiveness of commercial bank. The last section reveals the current status of international commercial bank and the financial scandals caused by the lack of ethical practices.The fourth chapter contains the core of this study. It beings with an introduction of the Bank of Chengdu. Then it sets the design principles of the evaluation index system. Michael Porter’s "diamond model" is applied to the research and analysis of financial competitiveness. The second section describes the index design. In this section, the ethical financial competitiveness of the financial evaluation model is built by collecting factors of commercial banks including:finance environmental ethics, finance customers’ ethics, financial competition ethics, employee ethics, promoting financial ethics and shareholders’ ethics. The evaluation model of commercial banks is based upon these six aspects. Section three shows the results of using the AHP method to calculate the weight of each indicator. Compared with the conventional method of qualitative evaluation, AHP gets specific and quantitative results, which is comparable by observing the weight of indicators. The key point of financial competitiveness can be visually compared, then by analyzing the score for each indicator, problem areas in Chengdu Bank’s financial competitiveness can be determined. The fourth section builds the scoring models of financial competitiveness of Chengdu Bank through the fuzzy comprehensive evaluation method. The resulting score for Chengdu Bank, according to the evaluation scores of the financial competitiveness, is rated as medium. Section five is the summary section, summarizing the results of the evaluation.The fifth chapter contains the analysis and recommendations of this article. Analysis of this chapter is first established in the previous chapter. This chapter first gives a multi-dimensional analysis based on the perspective of financial ethics of Chengdu bank’s financial competitiveness evaluation results. First, respectively, from the competitive environment of financial strategy (strategic factors, structural factors, industry factors, demand conditions), financial resource allocation competitiveness (financial resources and non-financial resources), the competitiveness of the financial interests of the trade-offs (stakeholders), three dimensions of competitiveness in Chengdu Bank classifies financial analysis. Second, combining the status quo from an ethical point of Chengdu Bank to its management capacity, resources, and market positioning multi-angle analysis of each index level effectively Bank of Chengdu. The fourth quarter from a financial perspective enhances the ethical financial competitiveness Chengdu recommendations by financial environmental ethics, finance customers ethics, financial ethics competition, employee ethics, financial ethics and ethical six areas shareholders increase their financial competitiveness.The sixth chapter is the conclusion of this study. It provides the results of the financial competitiveness of Chengdu Bank in the view of financial ethics, analysis and summary of the characteristics of China’s urban commercial banks and provides direction for further research prospects.Main ContributionsThe main contributions of this study:The study of the financial ethics of commercial banks’ financial competitiveness, explains the driving factors from the perspective of financial ethical theory, financial competitiveness theory and stakeholder theory from the financial ethical perspective and improves ethics theoretical basis of financial competitiveness, as well as the internal mechanism of commercial banks and financial competitiveness under the ethical point of view, contribute to the research of the ethics lost and conflict of commercial banks. The paper establishes, according to Michael Porter’s "diamond model" as well as the ethical theory with the financial management of commercial banks based on multi-AHP evaluation index, constructed from the ethical perspective of financial competitiveness of commercial banks and financial evaluation system, to achieve its qualitative evaluation combined with quantitative evaluation of the shortcomings and overcome traditional quantitative evaluation methods were evaluated only hard targets for the financial evaluation of comprehensive financial competitiveness of commercial banks to build a certain degree of practical significance. Research on the competitiveness of Chinese commercial banks by evaluating Chengdu Bank. Proposed financial ethics and methods of commercial banks on the path to enhance the competitiveness of Finance, to maintain the competitive advantage, respond to ethical issues, to overcome the shortcomings of traditional quantitative evaluation methods, which only evaluated the financial indicator. And has certain practical meaning on building the comprehensive evaluation model of financial competitiveness of commercial banks.