The Risk Management About The Financial Product Development Of Rural Commercial Banks

With the capital adequacy ratio as the core of the regulatory framework,the marketization of interest rate constantly deepening and under the constant impact of internet banking,commercial banks are faced with being limited in expansion of asset size and declining in profit gradually,they are keen on developing light asset business.Commercial bank's financial business conform to the trend and it has become an important engine for getting customers,increasing deposits and increasing profits.Be limited to the human,material and financial resources,the environment of market and regulatory policies,rural commercial banks are much slower than other types of banking institutions in the type of financial products,issue size,dimensions and other aspects.To fill the gap and share the growing interests,part of the rural commercial banks began to vigorously develop the financial business.But due to late starting,poor foundation,bad risk controlling,there may be a repeat of the Bank of Bahrain tragedy if lacking scientific risk management.This paper adopts the method of case study and takes a certain local rural commercial bank as a case.Through practical investigation,this paper emphasizes problems and risks in procedure of financial product development.According to the situation,it provides advices to solve the problems and it tries to provide reference for other similar insitutions.Through investigating and analyzing,the problems in risk management of financial product development in this bank as follows.Firstly,there is no sufficient demand research then products can't be met market properly and can't be avoided investment risk effectively.Secondly,there is no sufficient product position analysis then motivation of product development is not clearly and market promotion is inefficient.Thirdly,procedure of designing product which lacking supervision and balance mechanism is unscientific.Fourthly,information system is not perfect then investment is managed manually,inefficiently and fallibly.Fifthly,channel used for collecting advices for improving products is lacked.In view of the above problems,this paper puts forward the following countermeasures.First,establish a system for investigating and analyzing the information including economic development situation,investment market trend and commercial bank's financial products market dynamics.Second,establish a system for analyzing product positioning including strategic positioning of this bank,demand positioning of the market and target positioning of the customers.Third,establish supervision and balance mechanism for improving the procedure of designing product.Fourth,improve the information system then put up productivity and reduce the error rate.Fifth,clear market information feedback channel.Connecting with the case,this paper also tries to put forward an improved procedure of financial product development in rural commercial banks for helping them reduce and remove the risks maximally.Guiding rural commercial bank to developing financial product normatively,on the one hand,can help rural commercial bank share dividends of the rapid development of the financial business on the basis of the effective control of risks and there is a huge market demand;on the other hand,can effectively reduce the systemic financial risk probability which in line with national regulatory policy ideas.The research in related fields has important practical significance and long-term significance.This is the contribution of this paper.