Competition Triggers Innovation in the Banking Industry, International Elites Discuss its Development in China
------ Tongji-Mannheim EMBA Class at Pudong Development Bank
Tongji University
University of Mannheim
Tongji-Mannheim EMBA paid a visit to the Shanghai Pudong Development Bank on Nov. 5th, 2014 for a class on-site with 25 participants. The case study focuses on topics of the Shanghai Pudong Development Bank (SPD Bank) and the bank challenges in China.
The class began with visit of the Bank to digest its history. Standing by famous Shanghai Bund with exotic building clusters, the SPD Bank with huge granite and magnificent marble bears a splendid ancient Greek style. It is surprised with its past of Shanghai Branch of the British HSBC and Shanghai Municipal Government. Inside, appear the graceful dome with a mural inlaid, large mosaic tiles; dado exquisitely engraved and inlaid. All of these manifest its extensive and profound cultural elements and historical background. The SPD Bank looks like a new startup in this historic building with many great stories.
Established in 1992, the SPD Bank is not a large one compared to five Chinese major Banks. It, however, exhibits its distinctive characteristics, and shows its own unique position over the no long history about 20 years.
In the following expansion of the class, Mr. Li Lin, General Manager of the Strategy Department of the SPD Bank briefed the development of the Bank in the past, saying: “Compared with the five major state-owned banks, the SPD Bank is a small in scale, but flexible and forward looking, it grows quite rapidly with vitality.”
Unsurprisingly, the rapid development comes with various challenges. “As young having 《the Sorrows of Young Werther》, the pressures brought by the competition of the big traditional banking industry; the existing rules and regulations and the financial innovations in China, all impose great challenges on the future of the SPD Bank.” General. Li explained.
The class elaborated deeply on the financial innovation, inter-net finance with the development of ICT technology and the advance of the mobile finance. The Students from China and abroad of Tongji-Mannheim EMBA put forward their incisive and thorough points on sensitive, acute and hot issues, such as Alibaba in finance, impact of internet finance to the traditional banking industry in terms of traditional rules and operating concepts. In 2009, predicting that the internet would bring great effect on the traditional banking industry, the SPD Bank established a long-term strategic partnership with China Mobile. However, late the both found great difficulties in integrating the ICT technology into the traditional banking industry due to the inherent disorders between.
“The traditional banking industry is driven by customer demands; while the innovation is led by high technology. And the new technologic grows always faster than the reforms in traditional banking industry. As the result, “it is hard for traditional industries to grasp the development of technology.” Mr. Li exploited the Bank’s strategy for future development: Implant the “gene” of the internet into the “cell” of the Bank’s systems. Then, Mr. Li concluded the topic with great acuteness: “Take our own way with our own feet, but in others shoes”.
When asked what benefits are brought to the SPD Bank with such top-level interactions between the business elite circle and the academic circle of Tongji-Mannheim EMBA, Mr. Li replied, “The EMBA students of Tongji-Mannheim, highly international, are from the large German and Chines companies, Joint Ventures in China and across the world, they share us their rich working experiences, pioneering thinking and insightful perspectives. Actually, the SPD Bank develops itself to facilitate its business partners or customers while the Bank develops quickly. We are very glad to cooperate with the Tongji program and warmly embrace this two-way communications, which not only brings the banking industry new perspectives of the management from different industries all over the word, but also offers important thinking to the SPD Bank in its future development”.
