麥肯錫－案例庫Understanding Personal Financial Services Consumers in China (21606) Oct01 21606

1、Click to edit Master title styleClick to edit Master text stylesSecond levelThird levelFourth levelFifth levelPFS010212HK-misc*FootnoteSource:SourcesUnit of measureCONFIDENTIALDiscussion documentFebruary, 2001UNDERSTANDING PERSONAL FINANCIAL SERVICES CONSUMERS IN CHINAThis report contains informatio

2、n that is confidential and proprietary to McKinsey & Company and is solely for the use of McKinsey & Company personnel. No part of it may be used, circulated, quoted, or reproduced for distribution outside McKinsey & Company. If you are not the intended recipient of this report, you are hereby notif

3、ied that the use, circulation, quoting, or reproducing of this report is strictly prohibited and may be unlawful.EM FIG PracticeAP Marketing PracticeMARKET COVERAGE OF PFS 2000 SURVEYNew ZealandKoreaTaiwanChinaAustraliaSingaporeHong KongPhilippinesThailandIndiaIndonesiaMalaysia14 countries across As

4、ia-Pacific, Turkey, Brazil5,733 householdsApproximately 400 samples per countryUpper and middle income urban households (those active users of PFS products & services)ContentPurchase behaviorProduct holdingsChannel usageAttitudesDemographics3 years (1998, 1999, 2000)Japan*TurkeyBrazil1CHINA PERSONAL

5、 FINANCIAL SERVICES SURVEY SAMPLE DESCRIPTIONRepresentative sample across demographics of 4 big cities in ChinaBeijingShanghaiGuangzhouWuhanAge: 21-64 with financial decision making powerIncome cut-off3 top cities with annual household income RMB $30,000 or above1 inland city with annual household R

6、MB25,000 or aboveFilters45-min interviews with questions covering financial needs, buying behaviour, preferences, attitudes, product usage, etc.Main interviewSource:team analysis, government statistics21. Market is attractive with many opportunities2. PFS survey findings3. Customer segmentation4. Im

7、plicationCONTENT3Large population base of 1.2 billion of which only 15% reside in urban areas; pockets of affluence exist in citiesRapid GDP growth at 17% CAGR (1992-1999) at driving emergence of middle and upper income segmentsIncreasing per capita income driving demand for financial products beyon

8、d bank depositsHigh savings rate estimated at 45% of GDPAging population with over 65 segment estimated to reach 7% by 2000Very limited range of consumer savings and investment products, supported by very backward servicesMortgage and consumer loan market created only at the end of 1995Other consume

9、r loan products are severely restricted by PBOCMarket infrastructure very unsophisticated, e.g., most bank branches are not able to share dataTraditional channels dominate, i.e. branches for banksForeign entrants have recently introduced commissioned-agents, and professionally run agency systemSlow

10、development of alternative and remote channels; still largely a cash-based societyLack of local expertise and professional advice to educate customersMarket largely closed off to foreign playersHighly political license approval process Government under increasing pressure to liberalize, to facilitat

11、e WTO entryReform of state owned enterprises SOEs resulting in reduction of welfare benefitsReform of welfare system resulting in shift of pension and health care responsibilities to companies and individualsWeak regulatory framework that is also poorly implemented, resulting in a lack of transparen

12、cyRMB business can be attractive with wider spreads given the latent demand for, but lack of alternative savings and investment products, and unsecured consumer credit linesProfits in some customer segments will become increasingly squeezed as a result of government regulations and competitionMarket

13、 dominated by state-owned, or affiliated financial institutionsEmerging local and foreign entrants are aggressively penetrating and expanding market shareLarge number of foreign players intent on maintaining a presence/toehold despite strong entry barriersCompetitive environmentRegulatory environmen

14、tChinas PFS market evolutionConsumer demandDistributionProductsProfitabilityCHINA PFS MARKET IS UNDERGOING SIGNIFICANT CHANGES4HISTORICALLY FAST GROWING PERSONAL FINANCIAL SERVICES MARKETS IN CHINASource: China Statistical yearbook, China Bank Card office, McKinsey analysisMutual fundsSecuritiesDepo

15、sit100% =$5,351Market size and growth, RMB billions100% =$5,359$6,833$75Mortgages19971998CAGR 100%1999PFS assetsLife insurancePension$3,100ESTIMATE1994PFS LiabilitiesConsumer loans1997199819991994$13319971998199919961995Payment Quasi-credit & credit card outstanding(RMB billion)100%=1421222324CAGR 1

16、7%CAGR 11%11110015BUT PENETRATION OF PERSONAL FINANCIAL PRODUCTS REMAINS COMPARATIVELY LOW, MONEY IS IN BASIC DEPOSITSource: EIU, literature search, McKinsey analysisOutstanding balances as percent of GDP 1999ChinaUSMortgageStockbrokeringCredit cardDepositChinaConsumer financeChina73%35%China3%27%Ch

17、inaUSUSUSUS6LOW PENETRATION IS EXPLAINED BY LACK OF SUPPLY RATHER THAN LACK OF DEMAND AS DEMONSTRATED IN CREDIT CARD CASESupply of credit hindered by.PBOC set tight limit on overdraft to avoid credit explosionLack of integrated payment network to facilitate efficient transaction processingSlow speed

18、 in data transmission through underdeveloped tele-linesNo personal credit history in ChinaBanks are conservative about overdraft as potential risk is high due to poor control and risk management systemChinese culture is not necessarily debt adverseRevolving credit percent of card spendUSTaiwanHong K

19、ongChina7ProductCurrent market size (1999) RMB BillionsROA before taxPre-tax profit poolRMB BillionsEst. growth rateCompe-titionRegulationFavorableNeutralUnfavorableMORTGAGES AND CREDIT CARDS ARE THE MOST ATTRACTIVE PFS PRODUCTSDepositMortgageCredit CardStockbroking*Life insurance/pension5,962126120

20、21181,6402 52244115 2040 - 6032 - 4018 2525 - 30*Currently banks dont directly provide investment and insurance productsSource:China Information Bank, McKinsey analysisx=ESTIMATE8Source:China Finance Year Book; China Bank Cards Office; Lafferty Report CARD AND MORTGAGE MARKETS HAVE ENJOYED PHENOMENA

21、L GROWTH IN THE 1990sGrowth rate of cards in circulation, 1999Millions Credit cardsQuasi-cardsDebit cards959152CAGRPercentMortgage total balanceRMB BillionsCAGR105%19941995199619971998199991. Overall opportunity2. PFS Survey findings3. Customer segmentation4. ImplicationCONTENT10CHINA PFS CUSTOMER T

22、RENDSConsumers showed increased satisfaction towards their providerBig four banks customers have lower satisfaction than other private banksHowever, relative to other embryonic countries, China has lower satisfaction levelAre they satisfied?How loyal are they?Although the decreasing annual attrition

23、 rate, Chinese consumers are reticent about consolidating all of their financial services relationships with one institution They are relatively price sensitiveHence, disloyalty likely to increase as they grow richerWhere are the opportunities?What are the key success factors in products and service

24、s delivery?Investment products are likely to take off as consumers worry about retirementPent-up demand in credit product due to lack of supplyConvenience and competitive pricing are the key criteria for successEasy access and fast turnaround are the key success factor for credit products in ChinaBr

25、and/reputation is the key for investment product providersAlliance with local bank is critical to gain customers as they prefer local to foreign banksFace-to-face still best way to access customers, but newer channels start to emerge and will be important to retain customersPFS trends11CONSUMERS SHO

26、WED INCREASED SATISFACTIONTOWARDS THEIR PROVIDER OVER THE YEARSI am highly satisfied with my current financial institutionsI can get good service from my existing financial institutions199819992000CAGR 12%199819992000CAGR 3%ChinaAsiaSource:McKinseys proprietary PFS Survey 1998 - 2000 (based on high

27、& middle income groups)Percent strongly/somewhat agree12MOST OF THE BIG FOUR BANKS CUSTOMERS HAVE LOWER SATISFACTION THAN AVERAGE CONSUMERS IN CHINAI am highly satisfied with my current financial institutionsI can get good service from my existing financial institutions* Big four banksSource:McKinse

28、ys proprietary PFS Survey 1998-2000 (based on high & middle income groups)Percent strongly/somewhat agreePudong Development Bank (n=6)Bank of Communication (n=10)Industrial Commercial Bank of China* (n=255)China Construction Bank* (n= 84)Agriculture Bank of China* (n= 25)Other domestic bank (n= 10)B

29、ank of China Group*(n= 20)China Merchant Bank (n= 2)China average (71%)China average (69%)13HOWEVER, CHINA HAS LOWER SATISFACTION LEVELRELATIVE TO OTHER EMBRYONIC COUNTRIESPercent strongly/somewhat agree; N = 4,088I am highly satisfied with my current financial institutionsIndiaIndonesia ThailandMal

30、aysiaPhilippinesSingaporeChinaKoreaHong Kong TaiwanI am very loyal to existing financial institutionsI can get good service from my existing financial institutions*Arithmetic average of Asian countries surveyedSource:McKinseys proprietary PFS 2000 Survey (based on high & middle income groups)Asia av

31、erage* (75%)Asia average* (72%)Asia average* (70%)14ALTHOUGH ANNUAL ATTRITION RATE HAS BEENDECREASING.Proportion of new account openers over the last 12 monthsPercent of respondents; N = 416With new institutionsSource: McKinseys proprietary PFS 2000 Survey (based on high & middle income groups)31%An

32、nual attrition rate26%21%With existing institution19981999200015.CONSUMERS ARE RETICENT ABOUT CONSOLIDATING ALL OF THEIR FINANCIAL SERVICES RELATIONSHIPS WITH ONE INSTITUTIONNumber of banking relationshipOneMultipleSource:McKinsey Proprietary Asia PFS Survey, 2000Percent of respondents agree/strongl

33、y agreeI believe consolidating all accounts would beto my benefitI prefer to deal withone institution for all my financial needsIndiaIndonesia ThailandMalaysiaPhilippinesSingaporeChinaKoreaHong Kong TaiwanAsia average 47%Asia average 53%16AND CONSUMERS IN CHINA ARE PRICE SENSITIVE AND WILLING TO SHO

34、P AROUNDPercent strongly/somewhat agree; N = 4,088Shopping around for financial product is worth the effortIf I had to choose, I would prefer to use a financial institution that gave one or two percent more return on my money rather than high level personal serviceAsia average 61%Asia average (50%)S

35、ource:McKinseys proprietary PFS 2000 Survey (based on high & middle income groups)IndonesiaChinaTaiwanMalaysiaThailandPhilippinesIndiaKoreaSingaporeHong Kong17AS A RESULT, CONSUMERS ARE EXPECTED TO BECOME EVEN MORE DISLOYAL AS THE GROW RICHER*1999 figuresSource:EIU Viewswire, McKinseys proprietary P

36、FS 2000 survey (based on high & middle income groups)Percent strongly/somewhat agree; N = 4,088Proportion of respondents loyal to current institutionsGDP/capita*US$IndiaIndonesiaThailandMalaysiaPhilippinesChinaKoreaSingaporeHong KongTaiwanCustomer demand for more to stay loyalGreater competitive int

37、ensityArtificially high due to:Limitations on foreign banksSmaller number of major local banks181999AGING POPULATION CONCERNED ABOUT LONG TERM RETIREMENT2005E199565+ 199040-64 Changing population composition profile in China 1990-2005Millions of people20-39CAGR Percent+4+4+1“I am concerned about hav

38、ing enough money for retirement”Percent of respondentsN = 4111,1311,2111,259Source:1999 McKinsey Asia PFS survey; government statistics, McKinsey analysis22-2930-3940-4950-59AgeStrong Agree/agree1,32819Company sponsored retirement planCONSUMERS WORRIES JUSTIFIES SINCE CURRENT PORTFOLIOS TOO CONSERVA

39、TIVE AND RELY ON OTHERSSource: McKinseys proprietary PFS 2000 Survey (based on high & middle income groups), MASTaiwanChinaHong KongMain vehicle for long-term retirement investmentEquitiesGovernment retirement planProperty investmentLife insuranceMutual fundsBank depositsHigh growth vehicleGroup ven

40、ture20LOW CREDIT PENETRATION IS EXPLAINED BY LACK OF SUPPLY RATHER THAN LACK OF DEMANDSupply of credit hindered by.PBOC set tight limit on overdraft to avoid credit explosionLack of integrated payment network to facilitate efficient transaction processingSlow speed in data transmission through under

41、developed tele-linesNo personal credit history in ChinaBanks are conservative about overdraft as potential risk is high due to poor control and risk management systemCredit product penetrationMortgage loanChinaUSCredit cardPersonal loanOverdraftCar loan21MENTALITY ON CREDIT WOULD NOT BE A OBSTACLE F

42、OR FURTHER GROWTHChinese people said they are not willing to borrow .Percent of respondents agree“I believe it is unwise to borrow money except for a house” in fact, both mortgage market and personal loan market have been growing rapidlyAgreeNeutralDisagree100%100%19981999Source:Asia PFS Survey 1998

43、-20002000100%Mortgage balanceRMB millions199819991997199619951994Growth rate of total transaction volume and cards in circulation RMB 2,422 billions 180 million cardsTransactionsCards 5 yearCAGR 99%22TO BOOST PRODUCT USAGE, BANKS SHOULD ADDRESS CONSUMERS PRODUCT-SPECIFIC KEY BUYING FACTORS . . .Perc

44、ent or mean score* of product holders*5 = very important; 1 = not importantSource:McKinseys proprietary PFS 2000 Survey (based on high & middle income groups)Top 3 reasons for choosing financial products in ChinaSecuritiesA trusted well-established companyBest servicesConvenienceInvestment productsM

45、utual fundsCompany reputationAbility to switch funds within the familyAccess to representativesCar/personal loanCompetitive interest ratesQuick turnaround on loan approvalGood customer services and professional staffCredit productsMortgage loan criteriaCompetitive interest ratesQuick turnaround on l

46、oan approvalFlexible repayment term and methodsQuick loan turnaround key forcredit productBrand/reputationkey for investment23.AND INCREASE CONSUMER EDUCATION WILL BE KEYTO BOOST TRIAL AND USAGE OF INVESTMENT PRODUCTSPercent; N = 251Reasons for not investing in mutual funds/securitiesI do not have e

47、nough money to invest in stock/mutual fundsI am afraid of investment risksI am not familiar with stock market/investment funds and do not know what to investThe financial institutions that I use do not offer stock trading/mutual fundsLow returns on mutual funds/stocksEducate customers to have better

48、 understanding of risk return profile, and ways to employ products to achieve long term financial goals Set initial investment requirement at a level that encourage trial Actions to be taken by banks Source:McKinseys proprietary PFS 2000 Survey (based on high & middle income groups)Primary Importanc

49、e24How good do you think the return is for PFS product?BECAUSE CONSUMERS SHOW A WEAK UNDERSTANDINGOF RISK-RETURN RELATIONSHIPSHow risky do you think the PFS product is?ChinaSource:McKinseys proprietary PFS 2000 Survey (based on high & middle income groups)ChinaHong KongVery highVery lowVery lowVery

50、highHKDesiredMutual fundsInsuranceSecuritiesBank depositsBonds25OVERALL, TO ATTRACT CHINESE CONSUMERS, CONVENIENCE AND COMPETITIVE PRICE ARE KEYMain criteria when choosing a primary bankBy income and agePercent of respondentsOthersExtensivebranch/ATM networkConvenienceMiddle incomeUpper incomeBelow3

51、9Above39Importance of competitive price whenchoosing a bankBy income and agePercent strongly agree/somewhat agreeMiddle incomeUpper incomeBelow 39Above 39QuestionIf I had to choose, I would prefer to use a financial institution that gave one or two percent return on my money than high level personal

52、 service?IncomeAge26ALLIANCE WITH LOCAL BANKS IS ALSO CRITICAL TO GAIN CHINESE CONSUMERS AS THEY PREFER LOCAL OVER FOREIGN BANKSPercent strongly/somewhat agree; N = 4,088Most consumers consider it important to deal with local institution .MalaysiaChinaTaiwanSingaporeIndonesiaIndiaKoreaThailandPhilip

53、pines Hong Kong they dont see the benefit of foreign bankAsia average (68%)Asia average (33%)Source:McKinseys proprietary PFS 2000 Survey (based on high & middle income groups)Question: Dealing with a local institution is importantQuestion: Entry of foreign buyers will benefit me27BRANCH REMAIN KEY

54、AS THEY VALUE PERSONAL INTERACTIONPercent of the respondents strongly agree/agree, China N = 416, Asia N = 4,088Source:McKinsey Proprietary Asia PFS Survey, 2000I prefer to deal with a live person at branch or on phone rather than machinesMalaysiaIndonesia TaiwanIndiaPhilippinesThailandHong KongSing

55、aporeChina KoreaI am usually the first to try a new technologyI try new technologies when they have proven at least short track of recordI try new technologies when they have become widely acceptedI avoid trying new technologies until absolutely necessaryReceptive to technologyAsia average = 62%28BU

56、T THEY ARE OPEN TO INNOVATIVE CHANNELSI intend to use internet bankingPercent of respondents strongly agree/agreeSource:McKinsey Proprietary Asia PFS Survey, 2000I would open my banking account with my local supermarket if it offers banking services supported by a well known and respected local/inte

57、rnational bankChina PhilippinesIndiaMalaysiaIndonesiaSingaporeTaiwanHong KongKoreaThailandAsia average = Asia average = 38% 29Compared to other Asian countries, ATM usage in China is low.*Banking customers who use ATM at least once a monthSource:McKinsey 1999 PFS surveyATM usage in AsiaPossible reas

58、ons for under utilizationLimited availability of ATMsNo integration of individual banks networks Lack of functionalityCustomer attitudes (e.g., resistance to making cash deposits)USAGE OF MORE ADVANCED CHANNELS SUCH AS ATM IS STILL VERY LOW Percent of respondentsOnce a weekOnce a monthHong KongTaiwa

59、nChinaIndiaAsia average = 48%12%30.BUT A HIGHER PENETRATION OF ATM WILL BOOST THE USAGE Source:Central Bank report; government statisticsPenetration of ATM in AsiaPeople per ATM 1999USIndiaChinaPhilippinesIndonesiaThailandMalaysiaSingaporeTaiwanHong KongKoreaCAGR of total number of ATMs 1993 - 9915N

60、.A.66724627161410N.A.Opportunity to build more ATMs especially given the high demand for 24 x 7 availability31PHONE BANKING COULD PROVIDE NEAR-TERM MIGRATION OPPORTUNITYSource:McKinsey 1999 PFS Survey; International Data CorporationHong KongPhilippinesTaiwanChinaSingaporePercentage using phone-banki