The Chinese banking industry has become incredibly complex and competitive in the last year. Third-party technology companies such as Tencent are leveraging their massive technology base to tap into the banking industry, while joint-stock banks are teaming up with technology firms to improve their mobile banking and digital banking areas, ultimately to maintain and secure new market from the state-owned big four banks.
Even with technology becoming a key priority for key Chinese banks’ boards, CIO and CEO, many of the banks still lack basic infrastructure or are in need of key upgrades, or they will face steeper competition from third-party firms and more agile and innovative join-stock and foreign banks.
Joint-stock banks, along with community and local banks, have been seeking to become national competitive banks by implementing forefront mobile banking, data analytics, cloud computing, risk management, and AML/KYC systems. This is occurring simultaneously with Chinese banks attempting to automate their backend in wealth management and retail banking.
However, with this occurring in the backdrop, global technology venders are struggling to gain a foothold in the Chinese market. In our conversations with Chinese banks, our analysts have heard that Chinese banks are skeptical on many technology venders, and they prefer to meet-face-to-face and see demonstrations of how their systems work. In other words, Chinese banking executives want to build trust with their venders before signing a multi-millionaire dollar contract.
Technology venders on the other hand, are struggling to understanding the complex relationships in Chinese banks, and learning about exactly who they need to speak with to introduce their software and explain to the bank how they can help solve their problems. Chinese banks are massive, even the local community banks, and with multiple layers and stakeholders in this banks, technology venders need a clear guideline on how the decision making process works in these banks and who they need to speak with to get it done.
If your firm is in the Chinese market, and attempting to acquire more market share, meet more Chinese bankers from emerging and leading banks, The Key Systems and Executives in Chinese Banks 2017 Report is an essential tool that should be by your side.
The report outlines banks main systems in enterprise technologies, core banking, channels, data & analytics, payments, security & risk and treasury management software along with private banking and wealth management software. In other words, it outlines the Chinese bank’s complete architecture in investment bank, retail banking and private banking.
The report provides specific data on each of the bank’s spending on technologies. It also list the key-decision makers within the banks’ technology, finance, and digital departments, everything from the CIO down to key managers within the bank. The report also highlights key thoughts from the bank’s decision-makers that were gathered in interviews and conversations with the state-owned big four banks, down to the local tier-three and tier-four banks.
Analysts at The Dragon Banker have put together a list of three tips that will help you ink a deal with a Chinese banking CIO:
Keep all documents and conversations in Chinese. Even if you run into a English speaking senior technology director within a bank, they will be open to chit-chat in English to get to know you and your team, and in fact, it may help get your team’s fit in the door. However, when it comes to doing business and speaking about the technicalities of the software and business, it is important that the presentations, documents and emails are done in Chinese. This will allow your contact in the bank to share the documents with other key stake holders within the firm without having to translate it on their own terms.
Building trust is key in closing a deal with a Chinese firm. From the first point of contact to the signing of the deal could take multiple years if the project is large. This will mean that your team will have to have multiple rounds of meetings and present case studies to various stakeholders. This can be long, grueling and complicated, but it will allow your team to ensure that every skeptic within the bank is on your side, which will increase the chances of the deal going through.
This may include going on frequent outings with your potential client, which is a must-do as your team will have to build friendships with their friends, coworkers and higher ups.The third final tip is that relationships are everything, and in order to get the door opened in a local bank in Wuhan or Chongqing, having a local partner will crucial. This can be done by hiring a local partner, such as The Dragon Banker, or by hiring staff within the region of choice that already has contacts with these banks.
The reason for this is that many of the local and community banks do not have communication departments, and many of these banking CIOs do not attend international conferences and many do not even go to conferences in Shanghai and Beijing unless its organized by a Chinese friend or organization.
Having a source with the bank will allow your team to quickly jump over local cultural and relationship hoops that would otherwise take years to do.Working with Chinese banks has its challenges and risk, however, once established in the market, your relationships will pay off for many years ahead.