ICBC and the future of 'smart branches'.
“The bank of the future is a financial technology company.” The words of ICBC President Gu Shu still resonate loudly.
As one of China’s largest banks by assets, Industrial and Commercial Bank of China has made large-scale investments in the field of financial technology.
In 2019, ICBC’s technology investment reached 16.37 billion yuan (NZ$3.54b) accounting for approximately 2.2 per cent of annual operating income.
As at the end of 2019, ICBC had 34,800 financial technology personnel, accounting for 7.8 per cent of the total staff number of the bank.
In 2019, ICBC released the Smart Banking Ecosystem (ECOS 1.0), which showcased the bank’s financial technology innovation achievements, especially the establishment of the dual-core IT architecture of “mainframe + open platform”, which marked ICBC entering into the new stage of becoming a digital bank.
As at September 30 2020, ICBC had total assets of 33 trillion yuan (NZ$7.14 trillion) providing comprehensive financial products and services to over 8.5 million corporate customers and over 660 million individual customers worldwide.
ICBC has completed a number of industry-first applications in financial technology (fintech):
● April 2020 took a lead in China by unveiling a White Paper on Blockchain Technology applications in finance — the first of its kind in the banking sector. The white paper’s publication, amid a growing focus on China’s blockchain push, could rev up the economy’s fintech innovation engine amid the global Covid-19 pandemic, market watchers said. Finance is the most-explored area for blockchain technology-powered application scenarios, according to the white paper.
● Created a “mainframe + open platform” dual-core IT architecture. As China’s first bank with its core business processing based on a distributed cloud platform, ICBC has deployed more than 90 per cent of the bank’s application systems on the open platform, achieving a historic breakthrough in the IT architecture of large banks.
● Built the first distributed technology platform among large Chinese banks, and completed the distributed transformation of 138 application systems in total, fully supporting the development of key businesses.
● Was the first to realise 5G network connectivity in Chinese banks. It unveiled the industry’s first full-featured 5G smart online outlet in Suzhou.
● Blockchain platform is the first in the industry to pass the certification of the Ministry of Industry and Information Technology of China, and the first to be filed with the Cyberspace Administration of China. The ICBC internet of Things platform has 1 million devices accessed and provides massive internet of Things data support.
In API (application programming interface) application, ICBC’s more than 1000 services and products have been developed into standardised interfaces, which are open to more than 2000 partners. With ICBC financial service cloud, 15 industry applications including treasury, education and scenic spots have been introduced. The number of tenants exceeds 20,000.
ICBC has deployed artificial intelligence applications in all its main banking businesses, such as risk control, customer service, marketing, payments, anti-money laundering, and ICBC physical outlets.
The white paper's publication, amid a growing focus on China's blockchain push, could rev up the economy's fintech innovation engine amid the global Covid-19 pandemic, market watchers said.
Intelligent risk control
Risk control in the future must be the era of intelligent control, and comprehensively promote the transformation of bank risk management from “human control” and “machine control” to “intelligent control”.
ICBC has used data and technology to create more than 2000 risk control models and more than 4000 risk indicators, which formulate a new smart credit risk monitoring system. ICBC has also launched an intelligent global anti-money laundering system, covering 48 countries and regions.
ICBC has created the first voiceprint risk control model. Voiceprint recognition technology was applied in credit card anti-fraud, creating a new model of risk management and control.
Through telephone banking, ICBC handles credit card application, card activation, and due diligence links, and uses voiceprint recognition to provide customer managers with customer identification and fraud risk alerts, which comprehensively improves the level of smart risk control and customer experience.
The first batch of credit card voiceprint anti-fraud scenarios were launched in four provincial branches in June 2020.
Smart marketing
In the field of smart marketing, ICBC has conducted in-depth research on open source and commercial machine learning platforms, and independently built ICBC machine learning platforms based on open source artificial intelligence frameworks and applied them to scenarios such as smart marketing.
Using the AI models, ICBC’s wealth management and fund products marketing response rates have been significantly improved, covering more target customers.
ICBC has realised the integration and service of customer profile information based on its big data service cloud. Personal customer marketing profiling provides big data information services to the entire bank. Monthly usage covers more than 1 million customers, with daily average number of users exceeding 50,000. The customer profiles are displayed through traditional PC terminals, tablets and mobile phone apps, providing a powerful tool for customer managers' marketing work.
Smart customer service
ICBC has established service systems such as OCR (optical character recognition), customer service robots, natural language understanding and completed the pilot application of natural language human-computer interaction technology in the field of intelligent customer service in order to optimise ICBC’s customer care capacity.
Robotic services through WeChat, SMS, mobile banking, online banking and other channels have also been launched.
In the first half of the year, the business volume of smart phone voice and smart text services was 250 million, and the average daily business volume was 1.4 million.
When it comes to natural language processing, ICBC conducted in-depth research on semantic analysis related technologies and products, and has applied the research results to scenarios such as mobile banking voice navigation and fund transfer instructions and identification.
Robotic process automation
In 2019, ICBC put into production an enterprise-level robotic process automation (RPA) platform. The application of RPA in ICBC covers more than 120 business scenarios across front-desk, middle-office and back-end support.
Cloud service
ICBC has independently developed and established a distributed big data service cloud platform, taking the lead in the industry to transform the big data system from a traditional architecture to an independent, controllable and distributed architecture, which can provide more reliable and high-quality services for operation and management.
Blockchain
ICBC’s blockchain research began in 2015. In 2018, ICBC launched its self-developed financial blockchain technology platform — ICBC XI Chain.
At present, ICBC has completed 21 blockchain application scenarios, involving nearly 80 business applications, over 1000 service organisations, and funds exceeding 10 billion yuan (NZ$2.166b).
Blockchain can be used to manage demolition funds, poverty alleviation funds, and charitable donations to realise the circulation and traceability of information flow, approval flow, and fund flow, and ensure the compliant use of funds. It has now been applied to Guizhou Precision Poverty Alleviation Funds and Xiong’an Digital Business scenarios such as urban construction and charity fund monitoring during Covid-19.
ICBC has built the ‘China-Europe e-Single Pass’ cross-border blockchain platform based on blockchain technology, and collaborated with ports, banks, regulatory agencies, customs and others to create a cross-border trade financial service ecosystem to realise the circulation and traceability of international trade document flow, information flow and fund flows.
5G smart network and robots
In 2019, ICBC’s first full-featured 5G smart branch was unveiled in Suzhou. It integrated a series of financial technology methods including AI.
This 5G smart branch is located in Suzhou Industrial Park. There are two banking service robots in the branch providing intelligent financial services to customers such as welcome guidance, business processing, and product marketing.
The low latency of 5G and the core technologies such as AI intelligent algorithms and autonomous motion planning enable the two robots to proactively enquire customer needs and guide related businesses.
There is no need to hand-write receipts, move your fingers, and most banking services can be easily handled by robots.
Customers can also handle various businesses through ‘face swiping’ and other methods, without having to carry ID cards and bank cards.
Finally, in terms of top-level design, the ‘ICBC Financial Technology Development Plan (2019-2023)’ was formulated.
ICBC’s three strategic moves in the financial technology field include:
First, on May 8 2019, ICBC Technology, a financial technology subsidiary, was established, headquartered in Xiong’an.
Second, on November 4 2019, the Financial Technology Research Institute was established to integrate and enhance the power of scientific and technological innovation, with multiple laboratories such as blockchain and 5G.
The third was the release of ECOS, a smart banking ecosystem, on November 8 2019.
● Bin Liu is Deputy General Manager of ICBC (New Zealand).
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