Shadow banking refers to credit intermediaries and commercial activities outside the banking system. It has the characteristics of credit conversion (obtaining funds from the banking system by credit intermediaries such as channels instead of traditional customers), liquidity conversion (converting assets with strong liquidity into non-standard assets with poor liquidity) and term conversion (that is, building a short-term supplementary fund pool). It is further manifested in off-balance sheet business, wealth management business, inter-bank business and other business forms, which support commercial banks to avoid them.

Cross-financial business is a concrete manifestation of shadow banking, while non-standard business can be understood as a part of cross-financial business, and channel business can also be understood as a carrier of cross-financial business. Obviously, shadow banking actually means that some non-bank financial institutions and unincorporated products (such as monetary funds, cash management products and various asset management products) assume the credit creation function of the banking system in disguise, and their funds mainly come from the banking system, while the asset side is mainly based on various channels and various non-standard assets.

1. What are the risks of shadow banking?

1. There is liquidity risk, because the maturity mismatch leads to poor cash flow stability and weak fund supervision, so the liquidity risk of shadow banking is relatively high;

2. Shadow banking has credit risk. After all, they are not large formal banks, many of them are private, and their credit is much worse than that of big banks.

3. Shadow banking has a high correlation with traditional banks, and because of its secrecy and complex internal structure, when liquidity is tight, there may even be a break in the capital chain.

Second, the function of cross-selling:

1. Improve customer loyalty by increasing customer transfer costs. The more customers buy our products and services, the less likely they are to lose customers. Data from banks show that the churn rate of customers who buy two products is 55%, while the churn rate of customers who own four or more products or services is almost zero.

2. Reduce marginal sales costs and improve profit margins. Practice has proved that the cost of selling a product and service to existing customers is far lower than the cost of absorbing a new customer. According to the data of credit card companies, on average, credit card customers will not start making profits until the third year.