A joint survey by PwC and the China Banking Association revealed that bankers are more optimistic about the banking industry’s future over the next three years. Altogether, 39.4% of surveyed bankers expect economic growth of 6.5%-7.0%, 39.7% expect 6.0%-6.5% growth and 17.2% expect lower than 6% growth, over the next three years.
The findings reflect the transformation in China’s economy, from high growth rate to high-quality development, and that bankers managed their expectations when the economic development began shifting from a high to a steady growth rate.
For the future, bankers are optimistic about banking IT development and fintech, which encouraged 49% of the respondents to substantially increase investment – significantly higher compared to the prior two years. Fintechs are viewed as a positive contributing force, rather than challenge, by 54.0% of respondents. Talent shortage remains a major obstacle according to 82.2% of responding bankers.
According to Richard Zhu, North China financial services leader at PwC China the decade-long period of transformation has forced banks to seek differentiation.
“Now, bankers are paying more attention to the construction of banking information technology and continue increasing related investments. Notably, among the various emerging technologies, bankers have shown they are particularly open and positive about the potential of Fintech, which also stands out as a focus of investment. Concurrently, technology has made financial risks and their dissemination more complicated, leading to new challenges for bank management. Information security and information technology risks are a big concern for bankers,” said Zhu.
PwC says the adjustment of industrial structure, diversification of social financing and changes in the pattern of regional economic development have remained concerns for bankers. Yet, over the past decade, ‘comprehensively improving risk management and control capabilities’ has remained a consistent strategic priority for the Chinese banking industry.
Credit investment is also shifting to the urban infrastructure industry, and personal consumption loans have gradually become a focus for banks’ personal financial business development.
First published in FinTech Innovation