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CMBC Launches the Process Bank Reform

2007-9-4

 

By Han Ruiyun; 21st Century Business Herald

After the additional stock issue was made in the first half year, CMBC has ridded itself of the problem of capital sufficiency that has been its disturbance for years.

The Mid-year Report released on August 29 suggests that up to June 30, CMBC has achieved total net profit of RMB 2.821 billion, a growth of 1.120 billion over last year, with the increase by 65.81%; if graded by five bands, the bad loan rate of the bank has lowered to 1.10%, while the capital sufficiency has reached 10.84%.

This will allow CMBC to make more efforts for its reforms: not only the reforms on the departments that are advancing side by side, but also the reform concerning the process bank headed by the Head Office will soon be carried out across the board within the whole bank. The reform of the later will make an about-turn from the “departmental” bank that is universally accepted in China, to the “process” bank.

A “No Pain” reform to the process

In CMBC when the customers are trying to apply for a credit card, open an account or purchase the financial products, all they need to do is to simply fill out one form on which they only have to tick the required services or products, and need no longer to be troubled with writing the same info on a mess of forms. This “Personal Comprehensive Contractual Service” being promoted by CMBC came from an idea of CMBC Hangzhou Branch, which is an experimental bank for CMBC Process Bank reform.

In fact, “Process Bank” is a fully Chinese characterized name. On October 24, 2005, the “process bank” was first mentioned by Liu Mingkang, Chairman of China Banking Regulatory Commission (CBRC). On a conference Mr. Liu commented openly that almost all the domestic banks of China are suffering from material drawbacks in their working process; they are only “departmental banks” but not “process banks”. What he tried to imply is that the operating structure and resources of the Chinese banks are being deployed centered upon the departments within the bank while not subjecting to their business operation needs, which, with the disrupted organization, has made the customer-focused notion impossible to be implemented.

As the first bank in China to push process bank, CMBC has finished tendering for its process bank lately. The tenders were invited for 3 projects including business process design, developmental strategy and organizational structure, and human resources, and they have been respectively awarded to Beijing ZXJH Consulting, Boston Consulting and Hewitt Associated. In the 4 to 5 months the special teams from the 3 companies will be set up in the CMBC Head Office to implement and complete the projects. Meanwhile a Leading Team will also be established internally in CMBC.

The process bank demands the business processes to be configured with the customer needs, and the department configuration will follow. However, the business process following department functions is a common practice among the domestic banks. “The process bank will form an extension relationship among its departments but the departmental bank encourage the seeking for the departmental interest” An official from one of the above awarded companies said so.

 

 

 

 

 

 

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