Editor's Note: In terms of channel development, Ping An Bank opened online channels in 217, and realized the intelligence and automation of consumer finance business application processing with the help of Internet channels such as online banking, mobile banking, WeChat and portal websites.

Introduction:

In recent years, faced with the impact of the continuous narrowing of spreads and the increasing credit risk of enterprises in the down cycle, China's banking industry, which used to focus on corporate business, has suffered a major challenge. Many banks have slowed down or even experienced negative growth in corporate performance, shouting "to transform for performance" and speeding up the development of "light" retail businesses such as consumer finance.

under this industry background, Zero One Finance has launched a series of research articles entitled "Overview of Bank Consumer Finance Business", and the first article released-"How to do consumer finance business of China Merchants Bank with hundreds of millions of retail customers? In, we discussed the development mode and progress of consumer finance business under the development strategy of "one body and two wings" and "light bank" of China Merchants Bank. As the "king of retail" in the industry, China Merchants Bank, with its huge retail customer base and diversified product system, has continuously optimized its loan structure and increased the expansion of high-yield products such as consumer loans and credit card loans under the premise of controllable risks, and achieved good results (click on the topic to read).

On the evening of March 14th, Ping An Bank released its annual report for 217. According to the data, the profit of retail business accounted for nearly 7%, and consumer finance loans increased by nearly 9% year-on-year, which almost matched that of China Merchants Bank. Since 216, Ping An Bank has put forward the slogan of overall transformation to retail banking. With the help of the latest annual report, we can deeply understand the effectiveness of its retail transformation strategy and the development of consumer finance business that this series of articles focuses on.

Overview of consumer finance business of banks (II)

-Take Ping An Bank as an example

From the overall organizational structure, Ping An Bank's consumer finance business is included in the consumer finance division, the automobile finance division and the credit card division, and belongs to the big retail line.

the organizational structure of ping an bank

the picture comes from the annual report of ping an bank

1. the retail transformation has achieved remarkable results

since 216, ping an bank has been fully transformed into a retail bank, creating an intelligent retail bank and promoting the dual lightness of boutique corporate banks. As can be seen from the 217 annual report, the retail transformation has achieved remarkable results:

By the end of 217, Ping An Bank managed retail customer assets (AUM) of 1,86.688 billion yuan, an increase of 36.25% compared with the end of last year, and the number of retail customers (including debit and credit card customers) was 69.952 million, an increase of 33.43% compared with the end of last year.

the balance of retail loans (including credit cards) was 849.35 billion yuan, an increase of 56.95% compared with the end of last year, accounting for an increase of 13.17 percentage points to 49.82%.

the operating income of retail business was 46.692 billion yuan, up 41.72% year-on-year, accounting for 44.14% of the total operating income of the whole bank; The net profit of retail business was 15.679 billion yuan, a year-on-year increase of 68.32%, accounting for 67.62% of the net profit of the whole bank.

It can be seen that the profit rate of retail business is significantly higher than the average level. 44% of the revenue accounted for 68% of the net profit.

In 217, the NPL ratio of Ping An Bank's retail business decreased steadily. The NPL ratio of retail loans (including credit cards) was 1.18%, down .34 percentage points from the end of last year.

ii. breakdown of consumer finance

(I) Credit card transaction volume increased by 38.1% year-on-year

In the retail business of Ping An Bank, credit card growth was outstanding. In terms of development ideas, credit cards strengthen cooperation with the subsidiaries of Ping An Group, effectively combine the online and offline traffic, finance, technology and other resources of the Group, deepen market segmentation, and strengthen the operation of customer groups. In the second half of last year, Ping An Credit Card had in-depth cooperation with Ping An Securities, Ping An Trust and lufax, and launched a number of co-branded cards. At the same time, it also tailored special services according to customer needs.

For example, for the growing number of car owners in China, Ping An Credit Card has created car owners' cards such as car owners' cards, car owners' platinum cards and car home co-branded cards for middle-class customers. Relying on Ping An Pocket Bank APP, Ping An Credit Card has built a "comprehensive financial ecosystem of car owners" integrating car owners' services and financial services.

The rapid growth of credit card business is inseparable from Ping An's comprehensive financial advantages. Most of the customers of life insurance, property insurance and pension insurance in Ping An Group are high-quality customers with good debt repayment ability, and their credit card transactions are much higher than those brought by other channels, with a lower non-performing rate.

By the end of 217, the number of credit cards in circulation reached 38.34 million, an increase of 49.73% over the end of last year; The total transaction amount was 1,547.22 billion yuan, a year-on-year increase of 38.1%, and the share of credit card interbank POS transactions continued to increase;

In the sales application stage, the credit card business realized the omni-channel e-application mode, and the proportion of e-purchases increased by 25 percentage points compared with the beginning of the year; In the approval process, Ping An Bank uses new processes and technologies such as segmented approval and face recognition, and the automation ratio of the platform reaches 8%.

(II) The balance of consumer finance loans increased by 86.35% compared with the end of 216

Ping An Bank issued a total of 271.237 billion yuan of consumer finance loans in 217, and the loan balance reached 356.353 billion yuan, an increase of 86.35% compared with the end of 216.

among them, the main loan product-"Xinyi Loan" provides credit loan service of 1,-5, yuan to salaried people with monthly income of more than 4, yuan (not less than 5, yuan in first-tier cities). The annual report shows that as of the end of 217, the balance of "New One Loan" reached 129.844 billion, with a NPL ratio of .65%; Since its launch in 29, its scale has increased more than seven times.

In terms of channel development, Ping An Bank opened an online channel in 217, and realized the intelligentization and automation of consumer finance business application processing with the help of Internet channels such as online banking, mobile banking, WeChat and portal websites.

The annual report shows that the next consumer finance business will distinguish between operating loans and consumer loans. On the one hand, under the requirement of supervision to promote the high-quality development of financial services for small and micro enterprises in the banking industry, it will focus on the operating capital needs of small and micro enterprises, inclusive organizations and individuals; On the other hand, it will support individual's reasonable consumption financing needs from the real scenes and uses of consumption, and further cultivate new consumption growth.

(III) Auto finance loans increased by 44.2% year-on-year

In terms of auto finance, Ping An Bank continued to improve the product pedigree of auto finance around the main consumption scenarios of customers' whole life cycle, such as buying a car, using a car, maintaining a car and changing cars, and jointly carried out comprehensive financial innovation cooperation with many subsidiaries in the group according to customers' needs, providing customers with a whole-process "safe trip" solution.

In p>217, Ping An Bank issued a total of 118.384 billion yuan in auto financing loans, up 44.2% year-on-year. At the end of 217, the bank's automobile loan balance was 13.517 billion yuan, an increase of 37.1% over the end of last year.

in terms of business approval, through a series of measures, such as product innovation, credit process optimization, scientific risk quantification model and application of big data strategy, the auto finance business accounted for 65% of the total system automation approval, up 1 percentage points from the end of last year, among which the automatic approval rate of discount loan business for new cars within 3, yuan reached 82%, used car business reached 55% and auto loan business reached 29%.

3. Analysis of advantages of consumer finance business

1. Comprehensive financial advantages: channels cannot be copied

At present, the competition in the credit card market has become increasingly fierce, and how to avoid homogenization has become a problem that major banks are committed to solving. For Ping An Bank, it has an advantage that others can't match-comprehensive finance.

In 217, Ping An Bank migrated and transformed its products and services in the form of customers' recommendation, and specially created B2B2C mode, which combined the bank's account ability with the scenes and traffic of online platforms of the Group (such as Ping An Good Doctor and car home) through plug-ins and interfaces. Relying on Ping An Group's 1.3 million insurance agents and 153 million customer resources, Ping An Bank's retail business such as credit card, auto finance and new one loan has developed rapidly.

in the development of consumer finance business, Ping An Bank makes full use of the advantages of comprehensive expansion channels. Taking the owner's card as an example, in the case that only about 5% of the customers of most credit cards in the whole market are willing to pay the annual fee, more than 65-7% of Ping An Bank paid the annual fee in 217, which benefited from the deep cultivation of the whole group in the field of comprehensive finance and the perfection of its services over the years.

in 217, 4,126,6 new customers migrated through the comprehensive expansion channel, accounting for 41.38% of the total new customers in retail; The balance of customer assets increased by 99.261 billion yuan, accounting for 34.34% of the total balance of new customer assets in retail.

the comprehensive extension channel issued 41.416 billion yuan of new loans, accounting for 35.41% of the total new loans; 1.561 billion yuan of auto financing loans were issued, accounting for 8.92% of the total auto financing loans. Credit cards account for 45.99% of the new card issuance through cross-selling channels; The total non-interest net income of retail omni-channel consignment group insurance was 1.858 billion yuan, a year-on-year increase of 59.89%.

2. Technological innovation: building a new retail store

Online, the three major retail APPs of Ping An Bank, Pocket Banking, Credit Card and Ping An Orange, have been integrated into Pocket Banking 4., and the integrated new Pocket Banking app carries all products and services of retail business, realizing one-stop management of credit cards and debit cards. At the same time, APP also introduces fingerprint, voiceprint and face recognition technologies to enhance customer experience and enhance risk control, marketing and operation. By the end of 217, APP had accumulated 41.72 million users and 14.82 million monthly customers, ranking among the top joint-stock banks.

Off-line, Ping An Bank is promoting the construction project of intelligent outlets and configuring the layout of outlets. In August last year, the first pure retail outlet "Guangzhou Liuhua Sub-branch" was officially opened. The new retail stores are the offline entrance resources of Ping An Group. Its 12 million individual customers and nearly 3 million Internet users can provide the traffic base for Ping An Bank, and the construction of the four ecological circles of "medical service, automobile service, real estate service and financial service" provides rich customer service scenarios.

In 217, Ping An Bank added 1 branches, including 2 branches (Yancheng Branch and Langfang Branch) in the fourth quarter. By the end of last year, the bank had 7 branches and 1,79 business institutions.

In addition, Ping An Bank also introduced an "innovative garage" mechanism to incubate innovative products, services and models of large retail. Last year, the "innovative garage" has hatched core projects such as new retail stores and outlets that don't line up.

3. Organizational structure: Benchmarking Internet financial institutions

In the construction of scientific and technological teams, Ping An Bank introduced a number of Internet talents, mainly from Internet companies such as BAT. In 217, it vigorously introduced 244 professionals in Internet technology, products and marketing in the fields of credit card, consumer finance, auto financing and big data platform, including 26 middle and senior managers.

in the field of retail business, Ping An Bank has set up a retail IT team by benchmarking Internet financial institutions, and adopted a vertical management and control coordination system, with an overall manpower of over 2,1.