Because of the distinctive "origin", private banks very move always attracts attention of the financial field. Recently, the first batch of private banks have released the annual report of 2016. Among them, four of the five banks are profitable (Wenzhou Civil and Commercial Bank has not yet released). Small Bank and Network Business Bank's revenue are about 10 times than that in 2015, soared 9 times. 

Private capital initiated the establishment of private banks, which consists of the structural reform of the financial sector supply side. In the recent national financial work conference, Xi Jinping stressed that "to develop small and medium-sized banks and private financial institutions. So for the young private banks, the current turning losses into gains release of what kind of positive signal? Can they withstand the future test of the economic cycle? "

Director of the Zhejiang University Capital Market Research Center, Professor Huang Ying, was invited by the "Hangzhou Daily" reporter, discussed with Vice President of CITIC Bank Yiwu Branch Mr. Ding Zhiyi, and Executive Dean of Hengfeng Bank Research Institute Mr. Dong Ximiao.

Q1:

The most eye-catching micro-bank is getting larger, for example, only by its product "micro-credit". Is this model persistent? What is the reference to other private banks?

Huang Ying: I personally think that the great success of the micro bank has something to do with the "micro-credit" through the WeChat and mobile QQ these two super portal. Micro Bank is a typical Internet banking. They provide services through the network platform, and to control risks through large data technology. Although its business scale has been considerable, the problem is mainly limited in storage. Funds can only be got from the banks and other institutions, thus capital costs cannot be effectively lowered. Moreover, the effect of large data risk control also need to be further validated of the market. For other private banks, I think this model is of little significance.

Q2:

What suggests do you have for private banks in the business model of innovation and differentiation of development?

Huang Ying: to explore market positioning with differentiated characteristics is the key to the success of private banks. Therefore, private banks need to focus on market positioning in the business objectives set, business operations, supporting mechanisms construction. They should actively promote integration the "Internet +", large data analysis and other technologies with banking business, make product innovation in the supply chain finance, consumer finance, entrepreneurial finance, science and technology finance, Inclusive finance, green finance and etc., which are the future characteristics and focus for private bank differentiated development.

Q3:

It’s believed that private banks has just started business in 2015, the revenue and profit base are relatively low, and that in 2016 substantial growth is not surprising. So now, what are the worries and risk behind for private banks?

Huang Ying: First of all, network business banks and micro banks are positioned for the pure Internet banking, with small micro-users services, no physical network, and no cash business. But the development of other private banks are also limited by the traditional business outlets and business models. These private banks are difficult to compete with large banks in terms of size, strength, cost, information technology, and so on, especially on the ability to effectively reduce financing costs. Moreover, private banks do not exist in the national credit, credit status is also at a significant disadvantage. So in my opinion, the building of a current healthy market and institutional environment, such as the appropriate enlargement of private banking business scope, is particularly important to the survival and healthy development of private banks.