This updated Access Asia report covers the developments and strategies of the major banks, their Internet services and the prospects for further cyber-banking initiatives in China.
Online banking in China started in 1997, when China Merchants Bank launched an Internet payment system. Across Asia, banks are establishing Internet banking operations and extending their telephone banking operations while launching remote and WAP accessible banking services. However, China faces some obstacles in developing Internet banking including a low level of Internet penetration, low uptake of credit cards and an old habit of cash-and-carry banking. For many Chinese, banking in general is a new experience and in an economy where cash remains important, so bank branches also provide security and insurance to customers. However, with WTO imminent and China’s major banks having to face competition, the local players are increasingly seeing their extensive and heavily manned branch networks as a liability. Naturally, also, the reduced transaction costs of telephone and Internet banking are as attractive to Chinese financial institutions as they are to banks globally.