What is Business Consulting?

Consulting business refers to the company's professional knowledge, experience, technology and a wide range of information channels in accordance with the "Administrative Measures for Trust and Investment Companies", accepting clients' entrustment, and designating enterprises, projects, products, technologies, markets, management and services , Credit, etc. to conduct special investigations, analysis, and demonstration, and then provide economic information, data, operating plans and feasibility reports to the client.

Consulting business

Consulting services include

Thoughts on Small and Medium Commercial Banks Developing Consulting Business

Consulting business refers to the commercial banks relying on their own advantages in information, talents, reputation and other aspects to collect and sort out relevant information, and through the recording and analysis of this information and the movement of bank and customer funds, to form systematic data and programs to provide to Customer service activities to meet the needs of their business development.

To carry out consulting business is the survival and development needs of small and medium commercial banks (commonly referred to as joint-stock commercial banks and city commercial banks in China). At present, the profit of commercial banks mainly comes from loan income and intermediate business. Due to diversified investment, shunting of deposits, narrowing of interest spreads, and less and less loan income, the deposit and loan business should no longer be the main business of small and medium commercial banks. With the continuous improvement of the income level of residents in China, the gradual change of consumption concepts and culture, intermediate business and private business should become the object of vigorous development of small and medium commercial banks in the future. In addition, the needs of customers are multifaceted, and they are changing rapidly. The single day-to-day banking business such as deposits, loans, and settlements can no longer fully meet the needs of customers 'development. Customers' requirements for financial services are already comprehensive needs. The consulting business reflects the social, systemic, high-tech and value-added characteristics of financial services, and deepens the connotation of financial services. The professional knowledge and skills possessed by consulting service personnel can be regarded as the core competitiveness of the bank, which will become the basis for banking business innovation and the source of continuous growth of profits.

I. Target Market of Consulting Business

In general, China's commercial banks are still in the initial stage of consulting (financial advisory) business, but competition has become increasingly fierce. For the sake of risk and return, banks of different sizes should have different expertise, which is what is called "the ruler is short, and the inch is long." For example, for the financing of large-scale infrastructure projects, due to the special nature of financing methods and the complexity of operating methods, large financial institutions can play a prominent role in the design of such large-scale project financing solutions. Therefore, how to occupy a place in the highly competitive market is very important for small and medium-sized commercial banks to choose a target market.

Currently, domestic institutions that provide consulting (financial advisory) services include joint venture investment banks, domestic securities companies, trust and investment companies, investment consulting companies, financial asset management companies, and commercial banks. The target customers of the joint venture investment bank are mainly domestic large-scale red-chip enterprises, and their main business is also locked in the international capital market. Generally, they do not do small businesses. Among the consulting companies, foreign companies are more powerful, but their actual situation of domestic enterprises still needs to be further studied. Understand; domestic securities companies also act as financial advisors to enterprises, but they are only active in the capital market field, lacking an understanding of the long-term and credit markets, making it difficult to formulate comprehensive financial service solutions for enterprises.

Compared with other institutions, the advantages of commercial banks in consulting business are mainly reflected in the following aspects: (1) customer resources and information accumulated through long-term cooperation; (2) a network of institutions throughout the country; (3) strong financial strength; (4) Trustworthy bank reputation. Of course, commercial banks also have some disadvantages when conducting consulting services. For example, they cannot directly provide services related to capital operations.

For small and medium-sized commercial banks, due to their small size and weak funding strength, they cannot independently undertake the capital requirements of large projects and large enterprises and related consulting services like the four major state-owned banks or foreign banks. Therefore, small and medium-sized commercial banks should choose Target markets for SMEs, self-employed, privately owned businesses, and local residents.

At present, the management capabilities of SMEs in China, especially their financial management capabilities, are weak, and the standardization of management is generally not high. With the development and expansion of SMEs, management bottlenecks are becoming increasingly prominent. Once this bottleneck is cleared or broken, the development of SMEs will have an amazing jump. Because of this, the demand for management consulting services by SMEs is very urgent. Because SMEs do not have the conditions for economies of scale, it is difficult to afford the large costs required for product development and industry research, and banks have certain advantages in this regard, especially in terms of industry and macroeconomic research. The needs and trends of SMEs for management consulting business are: in the short term, management consulting services will be relatively concentrated on financial consulting, and financing contradictions will remain the most prominent problem for SMEs for quite some time. Due to high operating costs, small businesses will do everything possible to reduce costs, such as reasonable tax avoidance, loan discounts, and tax deductions for imported equipment. In the medium and long term, for the long-term development of SMEs, they must pay more attention to improving their management deficiencies, such as: misunderstandings or vacancies in strategic goals and business philosophy; unknown positions, division of powers and responsibilities; management control and decision support are useless. Wait. At the same time, with the growth of enterprises, SMEs need services such as counselling for mergers and acquisitions, listing, issuing bonds and even overseas investment and financing.

Small and medium commercial banks have a concentrated business area and are familiar with the situation in the region. They can have more energy to understand the situation of SMEs. Through interaction with small and medium-sized enterprises, a large amount of soft information beyond credit requirements can be grasped, and tailor-made financial services can be provided for them. Small and medium-sized commercial banks should make full use of the limited operating outlets in the community, based on the community, and provide them with a full range of financial and consulting services based on the expansion, extension, and cross-replenishment of financial product functions based on the financial needs of enterprises and residents in the community.

Content of consulting business

According to the relevant regulations of the People's Bank of China, consulting services include:

Enterprise information consulting, including project evaluation, credit certification, corporate management consulting, etc .; asset management consultants, including portfolio recommendations, investment analysis, risk control, etc .; financial consultants, including financial consultants for large-scale construction projects and corporate mergers and acquisitions consultants; cash management, that is, Assist companies to manage their cash account positions and balances of demand deposits scientifically and reasonably, and improve liquidity and use efficiency. The work that a financial consultant can do can be comprehensive, or it can be done in a certain aspect or in a certain link. Small and medium commercial banks can try and make breakthroughs in the following aspects.

Project investment (financing). It can help companies conduct feasibility studies on investment projects, design financing schemes, formulate financing credit structures, contact other financial intermediaries or participate in financing negotiations. Financial Advisor. For daily financial management of enterprises, they can find suitable investment projects for their idle funds, assist in the design of fund risk control, comprehensive management programs, and make adjustment recommendations to enterprises at any time according to changes in financial markets and corporate funds. The demand of family financial management for professional investment consulting is rapidly increasing, and consultants can also provide low-risk, low-charge, high-return services to residents of all levels by virtue of their rich professional knowledge and advanced technical means. Strategic management consultant. It mainly includes the following contents: analysis of enterprise management and financial status, development of business operations and financial diagnosis, and proposed improvement plans; analysis of the organizational structure and business processes according to the requirements of the enterprise, development of reengineering plans; market, industry and competitors Surveys to provide consulting services for business decisions. Advice on national policies. In order to promote the development of SMEs, governments at all levels in China have introduced many preferential policies to support the development of SMEs, but many companies do not understand this. Marketing of consulting business

At present, most of China's small and medium commercial banks adopt a follow-up market positioning strategy. The market positioning is similar to that of wholly state-owned commercial banks, and their own development direction has not been determined according to their own advantages and disadvantages. 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. Small and medium-sized commercial banks should choose a positioning strategy that focuses on special types and supplements with follow-up types. If you want to gain a competitive advantage in a rapidly changing market environment, you must realistically analyze the strengths and weaknesses of the bank, combine the four areas of geographic area, customers, products and services, and choose an optimal strategy that fits its actual situation. .

Taking into account the professional and complex characteristics of consulting business, banks should set up product manager positions in consulting business, establish customer managers to collect market demand, product managers provide professional services, and jointly form a marketing system for project teams. Consulting service is a kind of high-intelligence and high-intensity complex mental labor, and it is also a kind of profession called "the doctor of the company". This determines that consulting service personnel must have deep theoretical knowledge and rich practical experience in finance, finance, taxation, law, management, etc., and have good specialized training in consulting, and master skilled consulting techniques. Small and medium-sized commercial banks should form and reserve a high-quality team of professionals who are proficient in new businesses such as securities, trust, insurance, leasing, wealth management, consulting, and evaluation, to prepare for future mixed operations, and achieve expert management, expert management, and expert governance. Row.

The development of small and medium commercial banks' consulting services should also strengthen cooperation with external professional institutions. For example, it has established strategic cooperative relationships with professional intermediaries such as securities companies and venture capital companies, and explored specific ways for the two parties to cooperate in the fields of information exchange on investment banking projects, mutual recommendation of clients, joint work as corporate financial consultants, and personnel training. If for some business, the bank itself does not have the ability to provide consulting services, you can consider establishing strategic alliances with experienced and capable management consulting companies and using them to carry out project operations. In addition, small and medium-sized commercial banks should strengthen their ties with non-bank financial institutions, various industry associations, and government departments to understand interbank information and relevant government policies to capture and meet customer needs. For example, using its close relationship with government departments to help companies handle various preferential policies to achieve the purpose of expanding the consulting business market.

The core of consulting business marketing is to establish a good relationship with the consulted enterprise and make both parties profit from cooperation. Consulting business marketing not only emphasizes building good relationships with clients, but also maintaining such good relationships. For example, in daily communication, commercial banks can provide training in macroeconomics, financial credit, fiscal taxation, and marketing to SMEs in their communities to improve corporate management and innovation capabilities. Because the client's demand for management consulting is perennial, the better the relationship with the client is maintained, the deeper the understanding of the client, the more opportunities and better consulting services can be obtained.

Fourth, a few issues that should be paid attention to

1. The integration of internal bank resources is a prerequisite for consulting business. Providing both credit services and consulting services to customers can extend the value chain of financial services for small and medium commercial banks and increase the source of profits. Long-term tracking services for customers can also deepen their understanding, reduce the degree of information asymmetry, and prevent the risks of credit business. Due to the differences in business marketing priorities, risk management methods, business outlets, etc., and the different needs of customers in financial services, the development of consulting services requires close cooperation between credit, capital, risk management and even R & D departments Only in this way can we provide our clients with high-quality consulting services. If the internal resources of the bank (including information resources, human resources, capital resources, etc.) are not well integrated, it can be said to be a waste.

2. A high-quality talent team is the key to conducting consulting business. Consulting business is a knowledge-intensive business, which requires that people engaged in this business have a relatively complete knowledge structure, a keen perspective, extraordinary thinking, and certain business experience. Only by establishing a first-class research team can we continuously improve the level of financial innovation and financial services, form a strong new product development capability, and improve the core competitiveness of banks. The construction of the research team must not only pay attention to the continuous improvement of the team's quality, but also pay attention to the structure of the research team and the staffing ratio. Small and medium-sized commercial banks can follow the strategy of elite soldiers and high salaries to attract talents with strong research capabilities, excellent experience and quality.

3. An effective incentive system is the foundation of conducting consulting business. Only by designing a reasonable and efficient incentive mechanism can we mobilize the enthusiasm of cooperation among various departments, ensure the operability and effectiveness of consulting results, and improve the level of consulting services. Operational efficiency can be improved through interest mechanisms. For example, when allocating the benefits of different departments after completing the same financial advisory plan, they cannot rely on administrative orders, otherwise it is difficult to form a cooperative game.

4. Apply a long-term perspective to the development of consulting business. Although the direct benefits of consulting business are not obvious, the indirect benefits are considerable. In consideration of the bank's overall business marketing and the purpose of winning major customers, banks provide financial advisory services while adopting a method of not charging customers, but only as a means of competition to obtain a competitive advantage over other banks. However, some companies believe that consulting business is an additional service that banks should provide and are unwilling to pay. Therefore, commercial banks have less direct fees for conducting financial advisory services. However, the deposit and settlement business brought by the financial advisory business can enable banks to obtain greater indirect benefits.