How Do I Become a Commercial Banker?

The definition of bank size is generally based on the amount of assets. In China, small and medium commercial banks refer to national commercial banks, regional joint-stock commercial banks and urban commercial banks (including urban credit cooperatives and rural credit cooperatives) other than the five major commercial banks of Industrial, Agricultural, China, Construction, and Bank of Communications.

Small and medium commercial banks

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The definition of bank size is generally based on the amount of assets. In our country, small and medium-sized commercial banks refer to national commercial banks and regional

Small and medium commercial banks have promoted China's financial and economic development from two aspects. One is to support the development of a large number of small and medium-sized enterprises and the private economy through its flexible market sensitivity and high financial service efficiency, and the second is to promote economic growth. Institutional changes and innovations have promoted the marketization of China's financial industry.

The role of small and medium-sized commercial banks is that it brings new ideas, new concepts and new methods to the Chinese banking industry, promotes the entire industry's transition from planned monopoly operation to open competition, and improves the overall service level of the Chinese banking industry.

As one of the achievements of China's reform and opening up, if there is no exploration, no reform, no breakthrough, then these small and medium commercial banks will lose their significance. The role of small and medium-sized commercial banks is not only reflected in how many loans they have issued and how many companies they support, but more importantly, it has brought new ideas, new concepts and new means to the Chinese banking industry; It has promoted the entire industry's transformation from planned monopoly operation to open competition operation; it has improved the overall service level of China's banking industry through the introduction of competition mechanisms. Therefore, we must stand at a higher level and recognize the special role and status of small and medium commercial banks in China's financial reform.

China's small and medium commercial banks should adopt corresponding strategies to accurately locate according to their own conditions and marketing environment in order to improve their market competitiveness.

First of all , the market positioning of small and medium commercial banks should be based on the scientific segmentation of the market. The specific measures in practice are to require small and medium-sized commercial banks to change the single status of the past division factors in the process of personal market division, and use multiple variables to divide the market multiple times in order to find new market opportunities; in the process of segmenting the corporate market In China, new classification factors should be added, such as the enterprise life cycle, corporate credit rating, etc., so that banks can better understand the different needs of enterprises in order to implement product design.

Secondly , small and medium-sized commercial banks should comprehensively evaluate sub-markets and choose appropriate target markets. Small and medium-sized commercial banks should try to obtain information on their own resources, customer information, and competitor information. Through the analysis of these data, a comprehensive evaluation of the subdivided market can be made. Based on the evaluation, small and medium commercial banks should adopt a centralized strategy to select the target market. Concentrating their strengths on several market segments and implementing intensive operations can make small and medium-sized commercial banks occupy a larger share in smaller market segments, thereby forming a competitive advantage.

Finally , small and medium-sized commercial banks should conduct scientific and clear market positioning for the entire business activities based on the selection of target markets, and establish their own business activities in the future period.

The establishment and development of small and medium-sized commercial banks has promoted the reform of the financial system and strongly supported economic development. At present, China has formed a situation where state-owned commercial banks and small and medium commercial banks complement each other and serve the economy together. The pattern of state-owned commercial banks monopolizing financial services formed during the planned economy period has been broken, but it should also be seen that the formation of state-owned commercial banks' monopoly position has its historical background. For decades, state-owned commercial banks have made great contributions to the development of China's national economy, and still play a significant role in the development of the national economy. They are the main body of China's commercial banking system. State-owned commercial banks have accumulated rich experience in the course of more than ten years of reform and development, and have saved a large number of talents. They have the advantages of large-scale, strong capital, many operating outlets, and wide-ranging services. The economy has exposed some weaknesses and disadvantages. However, with the advancement of the reform of the operating mechanism and management system of state-owned commercial banks, the state-owned commercial banks will surely rejuvenate and play a greater role in China's economic development. Small and medium commercial banks have been developed on the basis of learning from the experience and lessons of state-owned commercial banks, but the development and growth of small and medium commercial banks cannot replace the important role of state-owned commercial banks in the development of the national economy. With the development of the market economy, China's economic composition has become increasingly complex, and the demand for financial services has become more diverse. Large banks and small and medium banks can survive and develop together in order to meet the needs of the continuous development of the market economy. As state-owned commercial banks continue to deepen their reforms, small and medium-sized commercial banks will be under greater market pressure and will enjoy greater development space.

(I) The development of small and medium commercial banks is needed for the reform of the national economic system

With the deepening of the reform of state-owned enterprises, the status and role of SMEs in China's national economy has become increasingly prominent, and it has become an effective way to solve the pressure of social employment, an important subject of technological innovation and technological progress, and a major driving force for economic activities. The rapid development of small and medium-sized enterprises has placed urgent demands on financial support. However, from the current situation, the financing problem has become a bottleneck for the development of SMEs. Due to the small scale of capital requirements of SMEs, the high cost of loan operation and management, the relatively low transparency of enterprises, and the difficulty in meeting the requirements of commercial banks on mortgage guarantee . Therefore, commercial banks have been slow to advance the issue of SME loans, and the difficulty of SME loans has become a major factor restricting the development of SMEs. To meet the loan needs of small and medium-sized enterprises, in addition to reforming the existing loan operation model of state-owned commercial banks, it is necessary to further develop a multi-level and diverse banking system to meet the financing needs of enterprises at different levels, especially small and medium-sized enterprises. . It is for this reason that further promoting the development of small and medium commercial banks has become a need for reform of the national economic system.

(2) The development of small and medium commercial banks is necessary to further improve the banking system

In recent years, China's financial system reform has achieved significant results. The state-owned professional banks have realized a major transformation to commercial banks, established and improved internal control systems, strengthened control over risks, and greatly improved their management level. With the establishment and development of small and medium-sized commercial banks, China has initially formed a multi-level and multi-type financial institution system, which has strengthened the operational vitality of commercial banks. In economically developed countries, small and medium commercial banks with community banks as the mainstay have become the main service providers of the regional economy. The flexible business models and targeted services of small and medium commercial banks have strongly supported the development of local economies. Taking the United States as an example, the number of small and medium commercial banks in the United States accounts for about 94% of the total number of banks, and the proportion of assets accounts for about 23% of the total assets of the banking industry. In many parts of the United States, regional banks and community banks are the leading financial institutions serving regional trading activities. Therefore, at today's increasingly rich economic level, it is necessary to further improve the banking system and continue to extend the service tentacles of small and medium commercial banks to meet the needs of regional and community economic development.

(3) The development of small and medium commercial banks is necessary to further promote the reform of the financial system

The establishment and development of small and medium-sized commercial banks has become an important part of China's financial system, and has become an important force for supporting economic development in addition to the four major state-owned commercial banks. Small and medium-sized commercial banks have promoted the improvement of financial industry service levels with their flexible business models. The development of small and medium-sized commercial banks is conducive to taking full advantage of their small scale and flexible operation, further promoting innovation in financial tools, financial methods, financial technologies, financial products, etc., improving the operating vitality of the banking industry, promoting competition among commercial banks, and promoting business The overall reform of banks, especially the promotion of state-owned commercial banks to change their long-term operating methods, and further accelerate the pace of commercialization. At the same time, it is also conducive to highlighting the characteristics and advantages of state-owned commercial banks and exploring a path for the efficient development of state-owned commercial banks.

(IV) The development of small and medium commercial banks should be combined with the reform of the equity structure of small and medium commercial banks

In the process of resolving regional financial risks, small and medium commercial banks have formed a shareholding structure led by local governments. The local government's shareholding has become an effective measure to support the development of commercial banks and reduce the risks of commercial banks. The local government's participation in shares has increased the enthusiasm of local governments to resolve financial risks, effectively played the role of the local government's organization and coordination, and contributed to the resolution of financial risks. However, it should also be noted that the local government's shareholding will inevitably put pressure on small and medium-sized commercial banks to intervene in the market and distort their market-oriented operation behavior. Therefore, with the development of small and medium commercial banks, it is necessary to gradually change the shareholding structure of small and medium commercial banks and further realize the diversification of the structure of small and medium commercial banks. It is worth noting that as small and medium-sized commercial banks take measures to increase capital and expand stocks, adjust equity structure and other measures, the shares of governments at all levels have declined, and are showing a further downward trend. ^[1]

1. The problem of market positioning-The convergence of market positioning may bring small and medium-sized commercial banks into a dead end.

At present, most of China's small and medium commercial banks adopt a follow-up market positioning strategy. From the perspective of regional positioning, they are generally located in central cities and economically developed regions. From the perspective of product positioning, basically what are the four major state-owned commercial banks operating, and what small and medium commercial banks do; from the perspective of customers, they are also mostly Concentrated on "two links, two highs, two uppers" (transportation, communications, universities, high-tech, listed companies, quasi-listed companies), the assimilation trend is obvious. Relatively speaking, small and medium-sized commercial banks have clear property rights and flexible operations, but the four big state-owned commercial banks have a strong network of branches, a relatively sound settlement system, and strong national credit support. So the advantages and disadvantages of the two sides are different. Because small and medium-sized commercial banks adhere to a follow-up strategy and do not have their own operating characteristics, so far, the monopoly pattern of the four state-owned wholly-owned commercial banks has not been broken, regardless of region, product, or even a single business. Highlighting its own development characteristics, only China Merchants Bank's "One Card" business seems to be able to compete with a wholly state-owned commercial bank. Especially in recent years, wholly state-owned commercial banks have accelerated the pace of reform and transition, and shifted their business development focus to central cities, making it even more difficult for small and medium-sized commercial banks to develop their businesses. In the current situation, the market positioning of small and medium-sized commercial banks is too similar to that of wholly state-owned commercial banks, and it does not have a certain relationship with determining its own development direction based on its own advantages and disadvantages. Therefore, this simple and even blindly following the "boss" without studying its own characteristics is bound to bring small and medium-sized commercial banks into the dead end of development.

2. Competitor issuesThe biggest impact on small and medium-sized commercial banks is not foreign banks, but solely state-owned commercial banks.

A wholly state-owned commercial bank has the unique advantages of local operations, has a high degree of popularity and credit, and has a social background familiar with China's policies, history, folk customs, humanities and the environment; it has a relatively stable customer base and a relatively complete and established Local and foreign currency settlement systems covering the whole country; there are considerable scale business outlets and service networks throughout the country and rich social resources; there are huge banking practitioners of different levels of knowledge, different professions and different ages suitable for different positions. Especially in recent years, the wholly state-owned commercial banks are actively shifting towards commercialization. The pace of reforms in employment, employment mechanisms, and distribution systems has further accelerated, management capabilities have been gradually improved, and government interference has been gradually reduced. More importantly, a series of preferential policies issued by the government, such as a large number of non-performing loans, a large number of write-offs of bad debts, and a large number of staff reductions, have gradually reduced the burden on the state-owned commercial banks, and their competition The vitality is obviously enhanced. They are the "four big lions" that come from the deep sleep. Therefore, after joining the WTO, the main competitors of small and medium-sized commercial banks are not foreign banks, but wholly state-owned commercial banks.

3. The talent system problem-The employment system is to repair and improve on the traditional system of a wholly state-owned commercial bank, and a flexible employment mechanism remains elusive.

First, look at the "entry" link. In recent years, the entry of small and medium-sized commercial banks has become more and more "kitschish", and has not introduced high-level talents with high salaries and high salaries. The current team status of small and medium commercial banks can be summarized as "three more and three less": (1) in the overall team, there are more people who understand traditional banking and fewer people who understand modern commercial banking; (2) operating skills in talent types There are many types of personnel and less experts and scholars. (3) There are more people who understand business operations in management positions and fewer people who are good at business management. At present, small and medium-sized commercial banks mainly rely on middle-level talents to fight "the world", because those who are capable are unwilling to come, and those who are incapable are afraid to come.

Secondly, from the "education" link. At present, due to the lack of awareness and methods of establishing a training system, small and medium-sized commercial banks have shown various worrying inversions in terms of training. (1) The content of training focuses on knowledge, skills, mentality and concept education. Although the current training of some small and medium commercial banks has made great progress in knowledge supplement and skill training, the psychological education that directly affects employees' work motivation still lacks due attention, such as professionalism, creativity, responsibility, The sense of mission, new concepts, and new concepts are not systematically educated, and the level of education is relatively low. (2) The short-term efficiency is emphasized over the long-term benefits in understanding the training results. Some small and medium-sized commercial banks are used to looking at training in an immediate way, lacking systematic research on talent training, and lacking respect and patience for medium and long-term training.

Third, from the perspective of "employment". It is essentially the same as a wholly state-owned commercial bank. Whether it is the appointment or appointment of cadres, the core problems of the cadre system have not been solved. The key point is that the current method of appointing and removing cadres leads to the lack of due restraint on the deputies at the same level by the governors at all levels. If everyone in a leadership team has strong professionalism, sense of work responsibility, and strong working ability, this contradiction may be covered up, but once the members of the team are not capable, the entrepreneur is not strong, the president is right The handling and selection of deputy posts at the same level are more difficult.

4. Operational risk issuesCustomer positioning and expansion desire are subjective and objective factors that constitute the operational risk of small and medium-sized commercial banks.

Small and medium commercial banks are limited in terms of capital strength and regional characteristics, and their main service targets are small and medium-sized enterprises. However, at present, most of these enterprises have problems such as high asset-liability ratios, poor operating stability, less effective assets that can be mortgaged, and insufficient development capacity. A small number of small and medium-sized enterprises even have asset restructuring, mergers and acquisitions, joint ventures or bankruptcy. Evasion of debt. Faced with a poor customer base, the customer base will be subject to more operational risks. At the same time, China s small and medium-sized commercial banks generally have a tendency to pursue bigger. In the absence of effective supervision and restraint mechanisms and self-regulatory mechanisms, they have excessively pursued deposit scale, loan scale, and institutional expansion, coupled with some unreasonable institutional incentives. With this tendency, its potential risks are inevitable. A senior person at China Minsheng Bank once pointed out that Minsheng Bank has COPYed the "viruses" owned by the four big state-owned banks. This is true of China Minsheng Bank as a listed bank with almost no state-owned shares, and other small and medium commercial banks are no exception!

5. Capital price issue-Due to the disparity in scale between wholly state-owned commercial banks and small and medium-sized commercial banks, capital prices will be a fatal blow to small and medium-sized commercial banks.

With the acceleration of China's interest rate marketization process, this problem will become apparent. Because the capital price protection point is strongly related to the size of the capital, that is, the larger the size of the fund, the lower the capital price protection point. In this way, the advantage of a wholly state-owned commercial bank in capital price is obvious. Because a wholly state-owned commercial bank can use the floating range of interest rates to legally impact the capital price of small and medium-sized commercial banks. At present, this has been proven from the pilot situation in Wenzhou in China. A person in charge of a wholly state-owned commercial bank once said: I will take advantage of my scale. In the first year, the deposit will rise to the highest point in the floating range, and the loan interest rate will fall to the lowest point in the floating range. The market is mine. In this regard, small and medium-sized commercial banks have begun to speak up. How they deal with the inevitable and imminent marketization of interest rates is really a question worthy of serious attention. ^[2]

After several years of development, small and medium-sized commercial banks have accumulated a certain foundation, strengthened their ability to resist risks, improved their level of business development, and have a good development prospect, but they also face a series of problems: First, due to historical reasons, institutional outlets, and market reputation Due to other restrictions, small and medium-sized commercial banks have limited ability to organize deposits, and business development has been restricted in market competition. Second, financial products still lack characteristics. Small and medium-sized commercial banks still have a single business with a relatively narrow business scope. Financial services have not yet fully reached SMEs and individual residents. Thirdly, there are deficiencies in corporate governance and insufficient internal control capabilities. The responsibilities of the shareholders meeting, the board of directors, the operating team and the supervisory board of small and medium commercial banks are not clear enough to achieve effective checks and balances. It happened. Fourth, the risk disposal needs to be deepened. Although the risk situation of urban commercial banks and urban credit cooperatives has been greatly alleviated through hard work, the risk disposal is becoming more and more difficult. From the perspective of city commercial banks, the rate of non-performing loans remains high, and it is becoming increasingly difficult to collect them. Judging from the situation of rectifying the urban credit cooperatives, although great progress has been made, the policies and operation methods of the urban credit cooperatives that have been withdrawn from the market have yet to be studied. The operating conditions of some urban credit cooperatives are still unstable, and once they are impacted, it is easy to trigger new payment risks. Fifth, the coverage of financial services needs to be widened. From the current distribution of small and medium commercial banks' outlets, they are mainly concentrated in economically developed regions and central cities. In some less developed regions, financial services of small and medium commercial banks are basically blank. With the acceleration of the reform and adjustment of the four big state-owned commercial banks, the institutions of the wholly state-owned commercial banks will withdraw from these places, which will definitely affect the financial services in these regions. How to meet the demand for financial services in these regions has become an urgent issue.

In the coming period, we must give full play to the role of existing small and medium commercial banks in supporting the development of SMEs. It is necessary to give further play to the role of market forces in the reform and development of small and medium-sized commercial banks, enhance the capital strength of small and medium-sized commercial banks by fully introducing private capital and moderately introducing foreign capital; support the business combination and reorganization of small and medium-sized commercial banks, and regulate the premise of market access Next, appropriately expand the service network of small and medium-sized commercial banks, further improve the organization of small and medium-sized commercial banks; promote small and medium-sized commercial banks to find the market position in competition, improve service functions, and improve their overall competitiveness and anti-risk capabilities. Effectively strengthen financial supervision to prevent and resolve risks of small and medium-sized commercial banks; study and establish deposit insurance systems, improve the function of financial safety nets, and ensure the stability of the entire banking system.

As the stability of small and medium commercial banks is directly related to the safety and stability of China's financial system and social order, further strengthening the financial supervision of small and medium commercial banks has become the top priority of the work of the People's Bank of China. The banking supervision department (People's Bank) shall urge and promote small and medium-sized commercial banks to establish a modern enterprise system, improve the functions of the shareholders' general meeting, the board of directors and the board of supervisors, introduce advanced corporate governance models for commercial banks, establish independent director systems, and improve corporate governance; actively urge Small and medium commercial banks strengthen internal control and internal management to prevent various financial cases. People's banks at all levels should strengthen supervision of small and medium-sized commercial banks through effective implementation of the supervisory responsibility system, and urge small and medium-sized commercial banks to increase their capital adequacy ratios and reduce the rate of non-performing loans. At the same time, it is necessary to further strictly review the qualifications of senior managers of small and medium-sized commercial banks, strengthen the supervision of senior managers, and strictly punish those responsible for commercial banks who engage in illegal and illegal business operations, and cancel their financial qualifications. ^[1]