Roundtable on Money and Finance (Autumn 2021): Digital Finance and Commercial Bank Management

2021-11-09 IMI

On October 16, a Roundtable on Money and Finance (Autumn 2021): Digital Finance and Commercial Bank Management was held in Guiyang, Guizhou. This event was organized by the School of Finance of Renmin University of China (RUC) and the School of Big Data Application and Economics of Guizhou University of Finance and Economics (Guiyang School of Big Data Finance), hosted by the International Monetary Institute (IMI) of RUC and a research group in charge of Guizhou Province’s major project entitled “Research and Interpretation of General Secretary Xi Jinping's Important Speech during His Inspection of Guizhou Province”(21GZZB01), and co-organized by the China International Finance Society, the Finance & Trade Economics and the Studies of International Finance.

Experts and researchers from the Chinese financial management authorities, research institutes and the finance industryattended the seminar. These experts and researchers included Li Lihui, former President of the Bank of China and head of the Blockchain Working Group of the Internet Finance Association of China; Cao Tong, Co-Chairman of IMI, former Vice President of the Export-Import Bank of China and Chairman of Hande Technology; Chen Weidong, IMI academic member, President of the Bank of China Research Institute, Secretary General of the China International Finance Society and Editor-in-Chief of the Studies of International Finance; He Dexu, President of National Academy of Economic Strategy of CASS, Dean of the Business School of the University of Chinese Academy of Social Sciences, Editor-in-Chief of Finance & Trade Economics; Ma Shaomin, Party Committee Secretary and Director of Guizhou Local Finance Supervision Administration; and Zhao Pu, President of Guizhou University of Finance and Economics. The seminar was moderated by Li Hanwen, Vice President of Guizhou University of Finance and Economics.

Director Ma Shaomin, President Zhao Pu and Chairman Cao Tong respectively delivered speeches.

Ma Shaomin expressed his welcome to all the guests on behalf of Guizhou Local Finance Supervision Administration and showed his gratitude forthe leaders and Guizhou University of Finance and Economics, who have long been supportive to the development of Guizhou's financial market. He pointed out that as the first national-level big data comprehensive pilot area in China, the provincial committee and government of Guizhou has actively seized the high ground of big data development, built a financial cloud with financial services, financial supervision and financial risk prevention and control all in one, as well asthe Guizhou comprehensive financial service platform for big data, and established diversified digital financial scenarios, accelerating the integration and development of big data and enterprises. Maexpressed his warm welcome tothe experts and researchers to come to Guizhouas a way to attract capital, talent and institutions for Guizhou's financial market, thereby creating a bright future of digital finance together.

Zhao Pu welcomed all the leaders and guests attending the seminar on behalf of Guizhou University of Finance and Economics and expressed his heartfelt gratitude to all leaders, experts and scholars who have been supporting the reform and development of Guizhou University of Finance and Economics. He pointed out that the new generation of digital technologies represented by big data, artificial intelligence and blockchain are driving the development of digital economy, and that accelerating digital transformation has become an important consensus in China and even the global financial industry. Digital finance plays an irreplaceable role in accelerating the high-quality development of economy and society. Zhao hoped that all the scholars and experts could share their insights intothe underlying logic and the wayforward of digital finance, andcommercial banks’ transformation and development in the wave of digitalization, thereby deepening theexchanges and cooperation between the Internet and digital economy.

Cao Tong welcomed and thanked the guests for their presence on behalf of IMI. He commented that digital finance is a product of the integration of digital technology and financial services, as well as an important part and strategic driver of the digital economy. Digital finance has become a common direction for the transformation and upgrading of the global financial industry, changing the financial system profoundly. The penetration of digital technology is as much as an opportunity as it is a challenge for the development of commercial banks. Cao hoped that experts and scholars would take this conference as an opportunity to make suggestions on optimizing China's financial institutions and market system andshare their insights into future development of China's financial industry.

Mr. Li Lihui delivered a keynote speech on the topic of “The New Pattern of Digital Finance”. He pointed out that China's fintech innovation has shown specific leading advantages in the world.As fintech innovations widely apply digital technology, digitized financial architecture is posing new challenges to financial data security. China should apply secure data technology, build secure data infrastructure, and construct an effective data security system to guarantee the security of data collection, data storage, data processing, data application and data privacy under the broad goal of maintaining national financial security.

Mr. Chen Weidong delivered a keynote speech entitled“Digital Finance and Commercial Bank Operation and Management”. He analyzed the opportunities and challenges brought by digital development to the banking industry in terms of social reform, customer demand, regulatory innovation and industrial development, and proposed that commercial banks should develop a comprehensive digital transformation strategy to change their organizational structure, increase technology investment, promote reform in customer acquisition, business and data channels, and develop a more automated, resilient and responsive “smart operation” system. Banks should also strengthen the training of personnel specializing in digital technologyin order to improve the management and operation of commercial banks.

Mr. He Dexu delivered a keynote speech on the digital transformation of commercial banks. He mentioned that the process of digital transformation of commercial banks should be based on and rely on data, which is the core and foundation of digital transformation of commercial banks. Commercial banks should effectively explore the intrinsic value of customer data, transaction data and market data, and apply the data to aspects including operation and management, data compliance, customer portrait, product design and market situation analysis tomake full use of data. The digital transformation of commercial banks is a long-term systematic project, which cannot be achieved overnight. Each bank should identifyits unique digital transformation path and should not blindly imitate or follow others.

Song Ke, Deputy Director of IMI and Deputy Secretary of the Party Committee of the School of Finance of RUC released the Digital Transformation Index Report of Chinese Listed Banks. The index system contains 4 tier-1 indicators, namely strategy, organization, service and technology, and 19 tier-2 indicators, which quantitatively evaluate the effectiveness of digital transformation of commercial banks. The objective weighting method was used as the main research method, the entropy method was applied to determine the weight of each level, and the equal-weight method was adopted to compile the index in order to conduct cross-validation. The sample interval is from the 1st quarter of 2017 to the 2nd quarter of 2020, and the panel data of 25 listed Chinese banks were selected considering data availability and continuity.

In terms of the overall index, in the digital transformation of Chinese listed banks, state-owned commercial banks are in the first tier. Five state-owned commercial banks take the absolute lead in the digital transformation index with ICBC ranking No. 1.Joint-stock commercial banks have obvious advantages and are in the second tier, with eight joint-stock commercial banks having a higher digital transformation index.All ofthe eightbanks are above national average, among which the China Merchants Bank has the best performance.Urban commercial banks and rural commercial banks are in the third tier, among which 7 urbancommercial banks have average performance andthe Bank of Hangzhou takes the lead, but the overall performance is below the national average.Five agricultural commercial banks are relatively slow in digital transformation and rank bottom on the digital transformation index ranking.

The roundtable was divided into two parallel forums that were held simultaneously. Parallel Forum I was chaired by He Qing, Assistant to the President of Guizhou University of Finance and Economics, Professor of School of Finance of Renmin University of China, Director of IMI Local Finance Research Office. Zhong Hong, Guest Researcher of IMI, Vice President of Bank of China Research Institute, Deputy Secretary General of China International Finance Society, Executive Deputy Editor-in-Chief of Studies of International Finance; Li Mingxin, Member of Party Work Committee of Guian New District, Guizhou Province; Sun Yong, Deputy President of Guiyang Central Branch of People's Bank of China; Zhang Xiaocheng, Professor of School of Data Application and Economics of Guizhou University of Finance and Economics and other guests conducted a discussion onhow digital finance can support high-quality economic development.

Parallel Forum II was chaired by Yang Yang, Dean of School of Big Data Application and Economics (Guiyang School of Big Data Finance) of Guizhou University of Finance and Economics. Wang Zhenxia, Director of Editorial Department of Finance & Trade Economics; Lu Bo, Member of the Party Committee and Deputy Director of Guizhou Rural Credit Co-operatives Union; Yang Chunlei, Vice President of the Guizhou Branch of Agricultural Bank of China; Zhao Junqiang, Secretary of the Party Committee and President of Guiyang Branch of China Everbright Bank;Li Chenggang,Professor of School of Big Data Application and Economics of Guizhou University of Finance and Economics and other guests held a discussion oncommercial banks’experience in digital transformation.

Han Mei, Secretary of the leading Party members group and Director of Guiyang Financial Office; Huang Liyang, President ofthe Guizhou Branch of Bank of China; Qin Wei, Secretary of the Party Committee and General Manager of Guiyang Management Department of Guizhou Bank; Shuai Bin, Member of the Party Committee and Vice President of Guiyang Agricultural and Commercial Bank; Li Yilan, Senior Account Manager of Bank of the Guizhou Branch of Bank of China; Zhang Wenming, Director of Guizhou Institute of Financial Technology and Chairman of Guizhou Mingsheng Investment Group Co and other guests also attended the roundtable.

In the afternoon, four academic paper workshops on “Digital Finance and Commercial Bank Management" were held simultaneously in a hybrid manner, in which the authors of selected papers presented their papers. Dong Ping and Yan Bingqian, editors of Finance & Trade Economics, chaired Workshop 1 and 2 respectively.The selected papers were reviewed and commented by Wang Chuan, referee of Finance & Trade Economics and associate researcher of the National Academy of Economic Strategy; Song Zhigang, editorial reviewer of The Journal of World Economy; Cheng Lian, researcher of the Institute of Finance of the Chinese Academy of Social Sciences and Feng Ming, associate researcher of the National Academy of Economic Strategy. Zhao Xue and Hao Yi, associate Editor-in-Chiefand editor ofStudies of International Finance chaired Workshop 3 and 4respectively. The selected papers were reviewed and commented by the journal's referee Pan Min, Dean of the School of Finance and Statistics of Hunan University; Fang Yi, Professor of the School of Finance of Central University of Finance and Economics; Jiang Hai, Vice Dean of the School of Economics of Jinan University and Zhou Yinggang, Vice President of the Wang Yanan Institute of Studies in Economics of Xiamen University.