Research on the Private Banks Centralized Management Systems in China

Abstract

China Merchants Bank's private banking development has always occupied first place in China for nearly 10 years. Its centralized management system for the private bank division is worth learning from. This paper focuses on the Chinese private bank centralized management system, and from the comparison with the decentralized management systems in other Chinese commercial banks, such as ICBC and the Bank of China, analyzes the advantages of the centralized one. From the comparison, this study finds the AUM of China Merchants bank is much higher than ICBC and the Bank of China [1], and the assets per household are two times higher than the other two, indicating that China Merchants bank's clients hold more sickness than the other two. Based on the core idea of the three processes of value creation, value transmission, and value capture [2] and the development process of the China Merchants Bank, this study proposes the centralized management model for the private bank. In conclusion, this study indicates that centralized management systems have advantages over decentralized modes in the long run. To reform the decentralized systems, the model suggests centralizing the research team, database and digital platform, and managers assessment, which can create more professional investment advice, higher working efficiency, and different holding stages services.