In recent years, a series of major changes have taken place in the external operating environment of domestic banking industry, and China banking industry is bound to form a new competitive pattern. As small and medium-sized banks, they should not only follow the law of banking development, but also adapt to internal and external constraints in combination with their own reality. Small and medium-sized banks should scientifically judge the external business environment, rationally analyze their own management ability, level and development stage, adhere to the basic direction of serving the real economy, subdivide markets and customers, clarify market positioning, give full play to their comparative advantages, and unswervingly take the road of scientific development with characteristics and differentiation. Only in this way can we achieve sustained and healthy development and make our own contribution to building a well-off society in an all-round way. Insisting on distinctive and differentiated development, major changes in the external environment have determined that the development mode and road of small and medium-sized banks must be changed. The development trend shows that banks are going through, and will go through, the transformation from capital consumption to capital intensive, from extensive operation to refined operation, and from homogenization to differentiation and specialization. The scientific development of small and medium-sized banks with characteristics and differentiation is not only the strategic guidance of the regulatory authorities for small and medium-sized banks, but also the inherent requirement for small and medium-sized banks to realize the interests of shareholders, fulfill their social responsibilities and reflect the value of employees. It is the only way for small and medium-sized banks to develop continuously and healthily. For a long time, whether it is a large bank or a small and medium-sized bank, the domestic banking industry has homogenization in business operation. As a small and medium-sized bank, if it competes with large banks in homogenization, it can only get a share, can't become bigger and stronger, and is always in a marginalized state; If we take a characteristic and differentiated business model, it is possible to be refined and strong. Take the banking industry in the United States as an example. Among the top 1 banks in the United States, comprehensive banks only account for 2%, and most of them are professional banks, all of which have their own operating characteristics and comparative advantages. It can be said that what is lacking in China now is not big banks, but characteristic banks that are characterized and differentiated and serve small and medium-sized enterprises, communities, agriculture, rural areas and farmers and other market segments. Small and medium-sized banks should take the road of differentiated and characteristic operation, strengthen market and customer segmentation, and adhere to their own market positioning. The market positioning of Huishang Bank is "based on local conditions, supporting small and medium-sized enterprises and serving the public". In recent years, the exploration and efforts of differentiated and characteristic management have been made mainly from three aspects: specialization, refinement and branding. Specialization means setting up a franchise organization with professional people to do professional things and provide professional level of financial products and services. For example, in small business, we will speed up the establishment of small business centers and the construction of characteristic branches. Refinement mainly refers to the transformation of service mode and marketing service mode, from extensive to refined, forming a marketing service mode with its own characteristics. Branding is to form its own characteristics and brands in products and services, enhance visibility and expand influence. For example, in the small business, since its establishment, we have been making great efforts to build "Little Giant" and "Young Eagle" service brands. In 212 alone, 893 "Little Giant" enterprises and 3,326 "Young Eagle" enterprises were cultivated. It should be pointed out that it is a systematic project for small and medium-sized banks to take the road of specialization and differentiation and build characteristic banks, which needs to create a good external environment. For example, implement more differentiated supervision policies for small and medium-sized banks, strengthen policy support for small and medium-sized banks, strengthen effective guidance for small and medium-sized banks, and create a good external environment for small and medium-sized banks to promote differentiated and characteristic operations and make them develop healthily and orderly. Exploring comprehensive operation and enhancing financial service ability From the development history of international banking, most financial systems in western developed countries have experienced several changes and repetitions of separate operation and mixed operation. Generally speaking, the international financial industry is moving towards integrated management. Judging from the history of domestic financial development, after 1993, China implemented "separate operation and separate supervision", that is, banks are not allowed to engage in non-bank financial services such as securities, insurance and trust. In recent years, many banks, especially large state-owned banks and national joint-stock banks, have set up financial holding companies and set foot in trust, securities, insurance, funds, financial leasing and other business fields, and the trend of integrated banking operation has come to the fore. For example, Everbright Financial Holding Group and Ping An Financial Holding Group already have full financial licenses. Some city commercial banks are also gradually exploring and getting involved in integrated operations, such as Bank of Beijing (61169, Share Bar) initiating the establishment of consumer finance companies and insurance companies, and Bank of Nanjing (619, Share Bar) participating in off-site city commercial banks and non-bank financial institutions. As far as Huishang Bank is concerned, it has also made active explorations in integrated management in recent years. Together with Chery Automobile Company, Chery Huiyin Automobile Finance Co., Ltd. was established. As the main sponsor, it initiated the establishment of Wuwei Huiyin Village Bank. At present, it is actively promoting the establishment of Jinzhai Huiyin Village Bank and the preparation of a financial leasing company. Some achievements have been made in integrated management and some experience has been accumulated. As far as the development trend of domestic financial industry is concerned, the integrated operation of commercial banks will certainly continue to evolve in the future, and the operation mode and content will also change constantly. First of all, from a macro point of view, domestic economic development has changed from extensional growth mode to connotative growth mode. China's financial system is dominated by banks, and traditional indirect financing methods are difficult to meet all kinds of direct financing needs, while various market entities providing direct financing still lack strong resource support and service capabilities; From the microscopic point of view, customers' demand for financial services is more personalized, comprehensive and comprehensive, and the continuous improvement of demand level requires banks to provide comprehensive financial services. Secondly, the profit model of China's banking industry, which is highly dependent on credit spread income, has not been fundamentally changed, and the development mode of "credit expansion-capital replenishment-credit expansion" is unsustainable. Especially under the background of stricter supervision and accelerated interest rate marketization reform, the banking industry is facing the urgent pressure of business transformation. In this sense, relying on its strong customer base and business channels, banks actively explore integrated and mixed operations including banks, securities, insurance, funds, trusts and financial leasing, give full play to the advantages of business collaboration, linkage and comprehensive services, explore non-interest income sources and optimize income structure, which is also an inevitable choice for banks to change their profit model and accelerate their own business transformation. Although the economic and social development has brought opportunities for the banking industry to carry out integrated operation, Chinese banks still face many constraints in engaging in integrated operation. For example, the financial market is immature, the financial ecological environment is not perfect, the relevant laws and regulations can't keep up with the development pace of integrated operation, and it is impossible to ensure the reasonable, standardized and effective implementation of financial supervision. The deposit insurance system and the protection mechanism for financial consumers' rights and interests have not yet been established. From the bank itself, commercial banks, especially small and medium-sized banks with city commercial banks as the main body, will be restricted by their own ability and management level. First, it lacks sufficient customer identification and cross-marketing capabilities, making it difficult to subdivide and share customer resources among subsidiaries, and unable to give full play to the potential advantages of integrated operation. Second, the lack of cross-domain management ability leads to the disconnection between management ability and business development, and it is difficult to deal with the problems in integrated management. Third, the ability of risk management and control is insufficient, and comprehensive operation may amplify other types of risks such as reputation risk, liquidity risk and related party transactions. Fourth, the talent pool for cross-business operations is insufficient, and there is a lack of talent teams for cross-market, cross-business and comprehensive operations. To promote integrated operation, small and medium-sized banks should fully consider regulatory policies and their own management ability and level, and should not go beyond their specific development stage. On the one hand, small and medium-sized banks can actively promote and actively explore integrated operations and launch their own financial leasing companies, fund management companies and trust companies with holding capacity under the premise of regulatory policies and their own capabilities. On the other hand, under the condition that their own ability and level are not yet available, they actively carry out complementary business cooperation with other non-bank financial institutions such as asset management companies, trust companies and securities companies, and borrow ships to go out to sea, not asking for everything, but asking for use. Business cooperation with peers can not only integrate external resources, expand business scope and enhance their own capabilities, but also reserve experience and talents for comprehensive operation. Accelerate business transformation and improve the level of business development. In recent years, due to changes in the external business environment, domestic banks are making efforts to promote business transformation. State-owned banks, national joint-stock banks and other advanced peers have been exploring business transformation for a long period of time, and have also achieved remarkable results. The main business of small and medium-sized banks is still in the traditional market, and the main source of income is still in the traditional business. Without the development of emerging business, the survival and development space of small and medium-sized banks will be very narrow, and the adjustment of economic structure, the increasing wealth of residents and the development of direct financing market also provide opportunities and space for banks to develop emerging business. While seeing opportunities, we should also see that compared with large and medium-sized banks, small and medium-sized banks still have many constraints such as regulatory policies and their own capabilities in developing emerging businesses and exploring emerging markets. With the support and permission of regulatory policies, city commercial banks should also strengthen their own capacity building. To promote business transformation, we must first correctly handle the relationship between business development and business transformation, and the relationship between traditional business and emerging business. Traditional business is the foundation and emerging business is the direction. Business development is the basis of business transformation, and business transformation is the direction and prospect of business development. Business transformation is a higher-level and higher-level business development, and it is the trend and direction of banking business development. Business development and business transformation are coordinated. We can't give up our advantages to find advantages, and we can't talk about transformation without development. Development and transformation are complementary and mutually promoting. We should transform in development, create resources and conditions for transformation through development, shape the core competitiveness of development through transformation, and improve the quality and efficiency of development. Compared with large and medium-sized banks, city commercial banks should pay more attention to characteristics and differentiation in promoting business transformation, and embark on a road of business development and business transformation that conforms to their own characteristics and capabilities. It is necessary to speed up business development, while insisting on developing traditional businesses, vigorously develop emerging businesses, and gradually form a business pattern in which traditional businesses, intermediate businesses and emerging businesses develop together. Do better and strengthen traditional business, consolidate traditional competitive advantage, and provide support for sustained and stable business growth. Adhere to the principle of giving priority to benefits and make intermediary business bigger and better. On the premise of controllable risks, clarify the development direction and main points of emerging businesses, focus on expanding businesses with controllable risks, good benefits and great development potential, and do a good job in emerging businesses. In recent years, Huishang Bank is also actively promoting and accelerating its business transformation. The main goal and direction is to change from financial intermediary to integrated financial service provider; From traditional businesses such as deposits and loans to traditional businesses and emerging businesses such as investment banks; From on-balance-sheet business to on-balance-sheet business; Vigorously develop intermediary business, from income mainly relying on deposit and loan spreads to diversification. Specific practices can be summed up as three diversities, one is diversification of debt sources, the other is diversification of asset application, and the third is diversification of income sources. The first is to stabilize the debt cost as the core and realize the diversification of debt sources. Bank liabilities are becoming more and more diversified, financial management and diversification. Issuing various forms of active liabilities such as financial bonds and interbank deposits will gradually become an important means for banks to increase their liabilities and enhance their liquidity. We insist on focusing on low-cost debt business on the one hand and active debt business on the other. The second is to improve the pricing level as the core and realize the diversification of asset utilization. With the process of "financial disintermediation", direct financing will occupy a more important position in the scale of social financing, and the original asset structure of banks with credit assets as the main body will be changed. To this end, while expanding the scale of assets and improving the efficiency of asset utilization, we have gradually formed a diversified asset utilization pattern based on credit and coexistence of various investment methods. The third is to enhance the service ability as the core and realize the diversification of income sources. With the promotion of financial disintermediation and interest rate marketization, the income of banks will be further diversified, and it will no longer be possible to rely solely on deposit and loan spread income. At present, banks generally attach importance to intermediate business with less capital consumption and less capital occupation. It can be predicted that in the next few years, China's banking industry will surely enter a period of accelerated transformation of intermediary business. Actively developing intermediary business and accelerating income diversification will be the only way for banks to promote profit growth. To this end, we vigorously develop intermediary business, adjust the income structure, and realize the transformation from "spread income-oriented" to "income diversification". On the one hand, actively apply for various business qualifications, enrich business varieties, improve service functions, expand product coverage through comprehensive services and cross-selling, and improve the profitability of various businesses. On the other hand, while continuing to develop traditional advantageous businesses, we should vigorously develop emerging businesses such as investment banking, interbank finance, bill finance and supply chain finance, strive to enhance the scale and efficiency of emerging businesses, transformation businesses and intermediary businesses, and gradually realize diversified income patterns. (The author is the president of Huishang Bank)