Yuebao’s Influence On Chinese Bank Industrial Upgrading

On June 13,2013, the Yuebao officially launched, and set off a nationwide Internet financial wave. The discussion and controversy on Yuebao has never stopped. Yuebao compared to traditional banking deposits has a huge advantage, and its trading convenience, flexibility, and high yield all causes a huge shock to our country banking, especially in the area of deposits. In January 2014, banking deposit even reduced the more than 940 billions, which caused great shock to the whole industry.As the rapid expansion of Yuebao’s scale, many internet companies and commercial banks have launched their own products which is like Yuebao. This makes financial market compete more intensely, and at the same time the greater influence on the traditional banking deposits. If banks want to develop continuously in the future, they must reform. But as a result of the limitation of related policies in China, the banking industry has been in a similar monopoly status, and the interest rate is not marketized. The banks have fixed spreads, which makes its profits high. But as Yuebao arising, the core profit of the banks is largely challenged. The cost of the deposits improves, and banking profits will decline. At the same time, Yuebao indirectly promotes the marketization of interest rates on deposits, and makes our banking industry to adapt in advance and deal with the development of the interest rate marketization in the future. In order to development, banks must carry out new business innovation, provide new products, to make profits more diversified. In addition, they should also learn the the advantages of Yuebao, and use it in the traditional banking business to innovate, improve users’experience and improve the efficiency of daily management. In addition to this, as a service industry, the employees are critical. Banks want to reform because of Yuebao’s competition. So they need employees with new skills. And they will also train the existing staff. At last this will promote vocational skills and qualities of the whole industry. With high-quality staff, the management and operation of the banking industry will have greater progress in the future. In conclusion, Yuebao can effectively promote Chinese banking innovation, and achieve the industrial upgrading.