With the ever-changing digital age, the operating environment of Chinese commercial banks is undergoing profound and complex changes. While new opportunities are constantly emerging, commercial banks are also beginning to face unprecedented challenges.
In the view of Kuang Wenchuan, deputy general manager of CLP Jinxin and director of the research institute, digital transformation has become a strategic measure widely recognized and widely adopted by commercial banks in my country, and has already ensured stable operations, improved customer experience, improved operational efficiency and strengthened Risk control and other aspects have brought results.
Fintech is the key underlying force supporting the digital transformation of banks. The core banking system, as the key pillar system carrying the core business of banks, has always been an area that banks have focused on and invested heavily in the construction of fintech.
China Electronics Financial Trust is a member company of China Electronics, with consulting, software product and development, quality and safety assurance and operation services as its main business. Since 2017, it has ranked first in the market share of IDC China's banking solutions for five consecutive years.
On May 4, Kuang Wenchuan accepted an exclusive interview with a reporter from the Economic Observer on the hot issues of commercial bank transformation, and gave answers to a series of hot issues in the field of financial technology construction.
Economic Observer: Why is it necessary to promote the transformation of the core banking system at this time?
Kuang Wenchuan: As a key application supporting the banking business strategy, the core banking system is an important support force for the bank's digital customer service. The application functions it provides reflect the bank's basic demands for core competitiveness and key business capabilities. Therefore, one of the key measures for the bank's digital transformation is to realize the transformation of the core banking system, that is, the core banking system adopts advanced business and technical architecture to more effectively improve the overall service efficiency of the bank, reduce operating costs, and provide customers with personalized services. Adequate public infrastructure support.
After nearly 30 years of development in my country, the core banking system has experienced the evolution from the "fat core" of the integrated business system, to the "thin core" of the service-oriented architecture (SOA), and then to the decentralized "distributed" The future development is still a long-term complex process full of challenges and variables. Benchmarking international peers, my country's core banking system has experienced concept introduction, imitation and upgrading, and comprehensive catching-up stages in the past 20 years. At present, its business concept has been on par with the world's advanced level, and it is undertaking core banking business processing with distributed technology. The field of technology has been at the forefront of the world.
The process of overtaking on this curve is full of challenges, because what we will face is the sea of stars. To this end, we need a rigorous organization, a scientific attitude and an innovative spirit, and we need the joint efforts of the entire industry and cross-industry collaboration to succeed. Only when we are always aware of the special positioning and rigid needs of banks in my country's economic system, based on collaborative innovation of the industrial chain and joint scientific research, tracking the global frontier of science and technology and based on independent innovation, paying equal attention to technological progress and business value, and keeping upright and innovative, can it be effective Promote and ensure the safety and smoothness of the entire process, and complete the strategic mission of empowering the digital transformation of banks in the new era.
Economic Observer: What kind of role does China Power Financial Trust play in the above-mentioned transformation?
Kuang Wenchuan: Under the current economic situation, discuss how to transform the core banking system based on the new ecology. The focus is on how to implement technological transformation through the upgrading of the core banking system, so as to support banks to achieve agile business and technology, and effectively promote the process of digital construction of banks.
As a member company of China Electronics, China Electronics Financial Trust has participated in major national projects through continuous R&D and innovation, and created a full-stack and global solution based on the financial industry scenario to provide key momentum for the digital transformation of the financial industry. It is a long-term participant in the development of China's financial technology , contributed a large number of banking application solutions.
The Economic Observer: What was the earliest beginning of the transformation of the core banking system?
Kuang Wenchuan: In recent years, in order to meet the requirements of promoting the development of the digital economy during the "14th Five-Year Plan" period, financial regulatory agencies have issued a number of policies to guide financial institutions to promote the process of digital transformation. Among them, the central bank issued the "Fintech Development Plan (2022-2025)", put forward the guidance on the development of financial technology in the new era, clarified the overall thinking, development goals, key tasks and implementation guarantees of financial digital transformation, and proposed to strengthen financial data. Based on the application of elements, further promote the sound governance system of financial technology, improve the digital infrastructure, promote the deeper integration of finance and technology, and achieve a leapfrog improvement in the overall level and core competitiveness of financial technology.
The China Banking and Insurance Regulatory Commission also issued the "Guiding Opinions on the Digital Transformation of the Banking and Insurance Industry", from six aspects: business operation and management, strategic planning and organizational process construction, business operation and management, data capabilities, technological capabilities, risk prevention, organizational security, and supervision and management Put forward key tasks, requiring that by 2025, digital financial products and service methods will be widely popularized, financial innovation based on data assets and digital technology will be practiced in an orderly manner, the development capabilities of personalized, differentiated and customized products and services will be significantly enhanced, and the quality of financial services will be improved. and efficiency are significantly improved. The digital operation and management system has basically been established, data governance has become more complete, technological capabilities have been greatly improved, and the level of network security, data security and risk management has been comprehensively improved.
Economic Observer: In recent years, what trend has the distributed technology transformation of the core banking system shown?
Kuang Wenchuan: The trend is accelerating. The reasons for this situation mainly lie in three aspects. The first is the gradual maturity of the underlying technology platform, as well as the maturation of supporting tools and process systems. Whether it is developed by the bank itself or commercial software packages provided by software and hardware suppliers, it is gradually available; the second is the production scenarios of some core businesses of banks. The successful implementation of production has provided a demonstration for the entire industry, verified the feasibility of key technologies, and enhanced industry confidence; the third is the clear requirements of national policies and industry guidelines, effectively organizing and promoting the entire technological development process.
Economic Observer: From the perspective of specific operations, how to transform the core banking system?
Kuang Wenchuan: From the perspective of the core banking system, successful transformation requires attention to four main directions.
The first is to provide scene-based service methods, actively build and integrate into the economic ecology, rely on digital capabilities and technological innovation, optimize products and customer service processes around financial scenarios, and improve the availability and convenience of banking and financial services. Its value can be further summarized as: improving service quality, innovating service models, improving service efficiency, and reducing service costs. Under this premise, banks are faced with the opportunities and requirements of diverse financial scenarios. In addition to the earliest cooperation with various platforms to create an open banking system, they are also developing in the fields of personal life consumption, corporate industrial chain, and government administration. Constantly looking for new entry points to incubate more financial scenarios with more detailed client needs. These demands require that the core banking system can provide these scenarios with common, shareable, and componentized basic business capability support, such as customer management, product management, interest rate management, expense management, account management, etc., so as to prevent financial scenario innovation from becoming a new silo sources, avoid increasing the bank's management complexity and operating costs, and help the development of ecological banks.
The second is to fully learn from the concept of new peers, continuously develop and enrich the connotation of customer-centricity, pay attention to customer experience, provide tailor-made services in an agile manner, continue to care throughout the customer journey, and promote service based on customer insight. Realization of customer value. The structure of customer groups and customer needs served by commercial banks are undergoing tremendous changes. In addition to continuing to serve high-value groups, banks need to strengthen their service capabilities for long-tail customers, develop inclusive finance, quickly identify customers, and Age characteristics, occupational characteristics, regional characteristics, time characteristics, etc. provide differentiated and more flexible financial services, dilute service costs on the basis of a larger number of services, and continue to enrich data assets on the basis of more scenarios and data.
Therefore, it is necessary for the core banking system to continue to implement the customer-centric service concept, and to continue to give it new connotations with the development of the times, provide business agility capabilities, and realize low-cost diversity, easy configuration, and Scalable product assembly capabilities to meet the needs of the general public. At the same time, the core banking system must use automatic and intelligent digital capabilities to reduce costs and increase efficiency, so that the general public can obtain financial services at an acceptable price, while taking into account the commercial sustainability of the bank. From the perspective of system capacity, due to more attention to long-tail customers, the customer scale has increased geometrically compared to the past. Improving system processing capacity and maintaining system stability under high capacity are also new requirements for the core banking system.
The third is to obey the national strategy and actively assume social responsibility relying on the banking service scene. For example, under the guidance of the national "dual carbon" strategy, the green financial market has officially entered the "fast lane". On the one hand, banks are required to fulfill their social responsibilities, reduce capital carbon emissions, and control carbon risks; on the other hand, banks are required to focus on ESG (environment, society, and corporate governance) to build a green financial system and support low-carbon enterprises and low-carbon enterprises. The project provides a variety of low-carbon financial services to jointly build green water and green mountains. In this process, banks are required to introduce external customer data into internal risk assessment, product system, and account services, which requires the existing business model of the core banking system to be scalable and able to quickly add "carbon" elements; The business process is programmable and can be quickly added to the "carbon" process to achieve in-depth scene integration. It can also provide standardized data output for the bank's risk control, product innovation, and account services, and assist the bank to establish a complete green financial system.
The fourth is to actively explore new technologies and achieve independent innovation on the premise of technological autonomy. Taking distributed technology as an example, due to the extreme importance of the core banking system in terms of financial security, as well as the special requirements in terms of high availability, high performance, high concurrency, and strong consistency, both research institutions and technology companies on the supply side, Commercial banks on the user side generally adopt active and steady R&D and implementation strategies based on the principle of prudence. Therefore, in the process of developing in the direction of distributed, micro-services, and cloud-native in the entire banking technology field, they are closely related to channels, marketing, Internet finance, etc. Compared with the surrounding areas, there is a certain lag. This lag is inevitable, and it is the process of key technologies moving from peripheral applications to core applications with gradual verification and maturity; this lag will also be made up, because with the maturity of technical conditions and the verification of key scenarios, Driven by the demand for online, scenario-based, and intelligent development of the financial industry, and with the demands of financial institutions to build independent innovation capabilities on a safe and controllable basis, distributed and cloud-native solutions are used in the core banking system field. The foundation of new technologies has been gradually established, and the transformation of the core banking system based on new technologies and new concepts is the general trend and will eventually become the mainstream solution.