Fintech is an important driving force for the digital transformation of finance. In recent years, financial management departments and financial institutions have made great efforts to solve the blockage of financial technology infrastructure, and improve the quality and efficiency of digital transformation and upgrading. However, in the face of fierce market competition, the development of digital construction of some small and medium-sized financial institutions lags behind, and it is urgent to take practical measures to speed up the level of digital construction. Under the baptism of the financial technology wave, where does the digital transformation of financial institutions work? How will small and medium-sized financial institutions break through?

Efficient access to online services

In the first half of this year, the demand for "contactless" financial services accelerated significantly due to the multi-point spread of the COVID-19 epidemic. Coupled with the widespread use of smart phones, financial services break through time and space restrictions, and traditional counter service scenarios such as transfer and remittance, investment and financial management are gradually replaced by online methods. In particular, as the most direct and extensive financial APP to reach users, it has become an important channel for the industry to gain customers, covering almost the mainstream business scope of various financial institutions. On the road to digital transformation, financial institutions are racing to seize the commanding heights of this online service.

The reporter combed through the recent semi-annual reports of listed banks and found that the fintech strategy has been comprehensively promoted and developed in depth, and has achieved high efficiency and fast access online. For example, the construction Bank to deepen the platform operation, relying on digital technology and technology empowerment, and constantly optimize the "CCB Huiunderstand you" APP, data show that the APP has more than 170 million visits, more than 22.5 million downloads, more than 1.65 million credit customers, credit amount of more than 1.3 trillion yuan. In addition, ICBC strengthened its own platform, created the main online position of customer service, and accelerated innovation in services, scenarios, and operations. As of the end of June this year, the number of personal mobile banking customers reached 488 million, and the monthly active users of mobile terminals exceeded 160 million, leading the scale and activity of customers in the industry.

Dong Ximiao, chief researcher of Zhailian Finance, believes that large banks accelerate and deepen digital transformation, continuously improve the level of digitalization, and enhance the suitability of the digital economy, which has enhanced the competitiveness of the post-epidemic era. In terms of strategy, enterprise-level digital strategy should be formulated based on its own business development and user needs, clear the direction and focus of digital transformation, and enhance the firmness of strategy and flexibility of strategy. In business, concepts such as Minimal viable product (MVP) should be applied to accelerate product innovation and iteration and enrich digital financial products. With mobile APP as the core, we will strengthen the integration of online and offline channels.

The consumer finance industry is also making efforts in the financial APP. The relevant institutions in the industry based on the data of AnalyzQianfan, conducted a semi-annual comprehensive evaluation of the monthly active users, monthly startup times and product functional experience of 20 apps of 15 consumer money companies. Instant consumption of Ease flower APP, Zhaolian financial APP, Home Credit consumer finance APP, China Post Consumer Finance China Post wallet APP, Ping An consumer finance APP, Central Plains consumer finance APP in the forefront. "As the most important digital loan window and customer access for consumer finance companies, the APP operation level not only needs the support of capital and technology, but also reflects the core service capabilities of a consumer finance company, and it also reflects the comprehensive strength of the platform's operation, products, brands and other aspects." Yi think tank senior researcher Wang Ruoxi said.

In the first half of 2022, the APP activity of half of the companies increased steadily, and the advantages of the head companies in the number of active APP users and startup times were more obvious. The relevant person in charge of the Consumer Research Institute said that it is foreseeable that in the context of online consumer finance business, the company is paying more and more attention to the role of its APP in acquiring new incremental customers, mining the value of stock users, and improving the user experience. From the perspective of APP growth path, consumer finance APP must take the initiative to expand its business scope, create various consumption scenarios, and constantly expand its business boundaries, otherwise it is difficult to support the expansion of consumer finance APP in the scene.

In addition, driven by financial technology, mobile payment services have developed rapidly, and digital RMB apps have continued to deepen their development in market application and technological innovation. Fan Yifei, deputy governor of the People's Bank of China, said that in recent years, the People's Bank of China has solidly carried out the pilot work of digital RMB research and development, and is committed to building an open and inclusive financial infrastructure to provide basic support for the high-quality development of the digital economy. The digital RMB made a wonderful appearance on the stage of the Beijing Winter Olympics, the newly upgraded digital RMB APP was officially launched in major application markets, the hardware and software wallet was successfully landed, major progress was made in smart contracts, barrier-free and age-appropriate products, and a multi-level product system was initially formed.

Good institutional standard framework

Taking the road of digital transformation in the banking industry is not only a practical need to build a new development pattern of the banking industry and create a new engine for high-quality development, but also a need to empower consumption experience and better support the development of the real economy. How can financial institutions implement digital transformation? It is particularly important to clarify the direction of transformation in terms of institutional norms and path guidance.

Since the beginning of this year, the People's Bank of China and the Banking and Insurance Regulatory Commission have successively issued relevant regulations to strengthen the empowerment of financial technology and promote the digital and intelligent transformation of the banking industry. For example, the Fintech Development Plan (2022-2025) issued by the People's Bank of China points out that to accelerate the digital transformation of financial institutions and strengthen the prudential supervision of fintech as the main line, digital elements will be injected into the whole process of financial services, focusing on the technology-driven and data empowerment of financial innovation. Promote China's financial technology from the "pillar frame beam" fully into the "accumulation of thick potential" new stage, and strive to achieve the overall level and core competitiveness by 2025 leapfrog improvement.

"This is a comprehensive deployment of fintech development for a period of time in the future, indicating the direction of development." Developing financial technology and accelerating digital empowerment is a "must answer" for financial institutions in the era of digital economy. For financial institutions, promoting the development of fintech not only needs to reserve technology and talent, but also to deliver satisfactory results in this' big test ', financial institutions must also break down the institutional barriers that restrict the development of fintech." Dong Ximiao said.

With the deepening of the structural reform of the financial supply side, the construction of financial standardization has also ushered in an important opportunity period. The People's Bank of China, the General Administration of Market Regulation, the China Banking and Insurance Regulatory Commission, and the China Securities Regulatory Commission jointly issued the "14th Five-Year Plan for Financial Standardization" (referred to as the "Plan"), putting forward new priorities for the digital transformation of the financial industry. Experts believe that financial standardization should more effectively adapt to the development of financial digital transformation, play a basic and leading role in the digital era, and help create financial services in the digital era with controllable risks. Financial standardization itself should also accelerate digital change and adapt more intelligently to the development needs of the financial industry.

Financial standards are the general requirements of unified technology and system for the digital transformation of financial institutions, and provide rules and guidelines for the business activities of financial institutions. The "Plan" proposes to accelerate the implementation of certification data standards and promote the steady development of certification digitalization. Xing Wei, secretary of the Party Committee and full-time vice president of the China Banking Association, said that the Association led the construction of the bank's letter blockchain service platform and released it in December 2020. The verification platform has changed from the traditional one-to-one manual offline processing of confirmation to the online circulation processing of the whole process, realizing the automatic return letter, the status of the confirmation can be tracked throughout the process, and the business efficiency has been greatly improved. As of August 31, 2022, the platform has accumulated technology access to 44 banking financial institutions and 135 accounting firms; The average processing time of the bank is 2 days and 10 hours, which has obvious advantages compared with the traditional offline business processing time of 5 days to 15 days.

It is worth noting that with the blessing of Internet technology, it is necessary to unify standards and norms to support financial technology innovation. As far as the digital yuan is concerned, Fan Yifei said that in promoting the ecological construction of the digital yuan, the expansion of the acceptance environment and application scenarios needs to be broken, of which the unification and standardization of standards is the key. Monetary system as the cornerstone of market economy, the unification of standards is particularly crucial. In the modern society with highly developed mobile payment, it is more necessary to break the barriers between payment tools, improve the efficiency of fund management and consumer payment experience.

In the first half of this year, the Banking and Insurance Regulatory Commission issued the Guiding Opinions on the Digital Transformation of the Banking and Insurance Industry, emphasizing that banking and insurance institutions should strengthen top-level design and overall planning, scientifically formulate digital transformation strategies, and coordinate and promote work. Dong Ximiao believes that this is the first special document on the digital transformation of the banking and insurance industries issued by the Banking and Insurance Regulatory Commission. Combined with the "Plan", through a series of measures to strengthen the top-level design and strengthen policies and norms, the digital transformation of banking and insurance financial institutions will be promoted to a new stage of standardization and orderly and more systematic.

Build a strong base to prevent risks

Recently, the "China Bankers Survey Report (2021)" jointly released by the China Banking Association and Pricewaterhousecoopers shows that promoting digital transformation has become the primary strategic focus of high-quality development of the banking industry for two consecutive years.

Specifically, the digital transformation of banking industry presents some new features. Xing Wei said that on the one hand, the overall investment in financial technology continued to increase, and more than 70% of banks accounted for more than 2% of their operating income in the past three years. In terms of bank types, large banks and joint-stock banks have the highest investment in fintech, and the growth rate of investment in fintech by agricultural and commercial banks is the most obvious. On the other hand, fintech talent construction has made obvious efforts, nearly 80% of banks' fintech personnel account for more than 2% of the total number of employees, and most banks have introduced a large number of technical experts in key fields such as big data, blockchain, cloud computing, and artificial intelligence.

Industry experts said that in general, banks have to test the water of digital transformation, "prepare enough food and grass", which is also an important starting point for financial institutions to improve market share and competition in the industry. With the gradual integration of big data technology into banking business marketing, loan monitoring and other links, financial institutions to implement digital transformation in advance to develop long-term plans that match their own technical strength, risk control and other aspects. At present, large and medium-sized banks and agricultural and commercial banks generally increase investment in science and technology research and development funds, and some adopt independent ways to promote digital operation, and serve the digital transformation of their own banks by formulating long-term plans for financial technology or digital transformation, establishing financial technology sector systems, and setting up specialized financial technology subsidiaries.

In order to build a solid technical base for the transformation of the banking industry, financial institutions of different sizes optimize their organizational structure and work processes from within, thereby improving service efficiency and preventing service and business model risks. Dong Ximiao suggested that for large financial institutions, the organizational structure of linear functional system should be optimized or even restructured, and cross-department and cross-level collaborative organizations of science and technology and business should be built to improve the innovation and iteration efficiency of financial products and services, and improve the speed of response to market and customer needs. Small and medium-sized financial institutions should give play to the characteristics of fewer institutional layers and short decision-making chains, promote the agile transformation of the whole organization, and enhance the ability of continuous innovation, rapid response, and strong execution.

However, the openness and interactivity of digitalization make financial online business still have potential risks. Dong Ximiao said that for the financial management department, it should further improve the relevant supporting rules, balance the relationship between financial innovation and prudential supervision, improve efficiency and prevent risks, make full use of regulatory technology, and improve the regulatory efficiency of digital transformation.

In addition, to accelerate the digital transformation of the financial industry, we must maintain both "speed" and "temperature" services. At present, it is important to note that the elderly, disabled, ethnic minorities and other customer groups still face many problems in the process of using digital tools. The relevant person in charge of the Banking and Insurance Regulatory Commission said that financial institutions should focus on service scenarios and high-frequency matters involved in daily life, strengthen the construction of application software functions such as large-character version, voice version, national language version, and concise version, enhance the service coverage of non-network areas and customers who cannot reach the network, and improve the availability of financial products and services. We will provide more comprehensive, thoughtful and direct facilitation services to address the "digital divide" and enhance people's sense of gain, happiness and security.