An Empirical Analysis Of The Profitability Factors On Direct Banks And Traditional Banks

Since 2013,China's economic growth rate continued to decline,the banking deposit and loan spreads getting narrowed,and lead to the banking profit growth rate decline.At the same time,the Internet is entering the majority people's lives,with the help of communications technology and mobile innovation burst increasing,and the so called Internet banking has been created due to the combination of financial services and internet technology.With the impact of Internet financial,bank's profit margins have been compressed and China banker began to think about into transition,which,direct bank gradually appeared,and steps into the public view.Direct bank is unique in the Internet banking industry because of their outstanding characteristics:decentralization,light assets,elite team and no branches.These attractive characteristics are seizing traditional banking industry.Direct bank originated and developed rapidly in Europe and the United States.So far,there are hundreds of direct banks in the United States and Europe,while the largest one have developed into a global direct banking group.China's direct banking industry is still in the initial stage.In 2013,China Minsheng Bank took the first step to setup a direct bank,so far,we are still groping forward in marketing,product optimizing,promoting,positioning,supervising and other aspects.Based on the above reasons,this paper is focus on the theory and data,in-depth comparative analysis of the difference between the United States and Germany direct bank with other traditional banking industries.And using profit and operating model to demonstrate the advantages of direct bank,in order to persuade China's banking industry to innovate and change.At the same time,this paper using Bank of China as a case study example to illustrate the truth and fact.In terms of the study and development of direct bank,this paper wants to put forward the idea of setting up the direct bank,and make Bank of China great again.