Development strategy of commercial banks

Author: Demetris N. Kourafas | Translator/Country: Mainland China
Publisher:
Publish Date: 2005-07-01
Features: Over the past 10 years, the basic service standards of banks have changed, which is closely related to human resources: the basic service standards of banks have shifted from tiered banking services and cluster banking services to customer-centric banking services, in addition to product design, production, and distribution. A key strategic issue related to human resources involves the bank's own employees—as well as its management. This issue encompasses employee selection and hiring; establishing personal accountability, instructions, and goals; the ability to manage overall operations; lifelong learning; promotion and compensation; and carefully monitoring the number of employees and management cost factors. Bank management should not only be committed to ensuring that all traditional and skills of bank employees undergo comprehensive reform but also ensure that there is no significant friction between bankers and merchants. Since bankers and merchants have different traditions and work functions, conflicts often arise between them. Traders buy and sell securities: bonds, stocks, options, futures, commercial paper, certificates of deposit, and short-term Treasury bills. This is done either for clients, in which case the trader can charge the client a fee, or by using the bank's funds for direct investment. If a trader wants to profit from a trade, they must make quick and decisive decisions immediately after or during a phone call with the client. Bankers typically have a long-term perspective and often invest months or even years in nurturing client relationships to turn them into their own clients. They earn fees by providing financial advice to clients; they offer advice on investment and portfolio management for clients; and they also aggregate new suggestions in project financing. Banks no longer use the old, superficial management methods for client accounts. Although most of the functions mentioned earlier—except for project financing—are handled by retail bankers, wholesale bankers still employ a more complex approach for companies. Investment bankers are solely focused on mergers and acquisitions—or downsizing companies. Any type of banker needs to master their own client base. The third key factor in a bank's human resources is its shareholders. The role that bank shareholders should play is often underutilized, and they are often taken for granted. However, as we will see in Chapter 8, bank shareholders are not just owners of the company but also contribute to enhancing the company's business and reputation. P27