Addressing senior executives from Chinese banks at The Sixth China Financial Development Forum, held in conjunction with the CIFTEE Exhibition in Beijing, Mr. Sievewright spoke about future trends in financial services and their impact on Chinese banks.
"When we look at the components of revenue in mature markets (such as the U.S.), nearly half of banksâ income is generated from non-interest items. In China, about 11% of income is generated from non-interest items. That means there is a tremendous opportunity for well-positioned Chinese banks to increase fee revenue," said Sievewright.
The conference and invitation-only forum, held at the Beijing Exhibition Centre, was sponsored by the Peopleâs Bank of China and attended by 80,000 participants and 200 exhibitors.
Sievewright noted that Chinese banks will face increased competition from foreign financial institutions looking to make investments in the Chinese market, as well as new competition in the form of insurance and brokerage companies offering banking services. He added that while banks have done a good job building new delivery channels, the lack of integration of these channels makes delivery of consistent data, an essential element for customer relationship management (CRM), nearly impossible.
"Technology is not enough for a successful implementation of CRM." Sievewright commented. "More than 70% of CRM initiatives fail to meet business expectations, despite technology improvements, because the organisationâs culture and processes are not aligned with CRM strategy."
He cited four foundation blocks on which Chinese banks should focus â deepening customer relationships via CRM, improving efficiency ratios, increasing asset productivity and improving risk mitigation.
Sievewright concluded, "As the financial sector expands, Chinese banks have a great opportunity. To make maximum progress, however, they need to adopt and invest in enterprise-wide risk and customer management systems to compete effectively with foreign banks."