Bank of China Unveils “1234” Fintech Strategy Framework


One of China’s big four state-owned banks has launched a slew of new strategies to drive the expanded use of fintech as part of efforts to improve efficiency and ameliorate risk.

At a press conference held on 9 August Bank of China (BOC) provided a more detailed account of the fintech strategy first unveiled by chairman Chen Siqing (陈四清) earlier this year at the release of the big four lender’s 2017 performance results.

Liu Qiuwan (刘秋万), BOC chief information officer, said that the bank’s digitisation development path revolved around a “1234” strategic framework comprised of 1. digitisation as the “main axle,” 2. the establishment of two main frameworks, 3. the creation of three main platforms, and 4. a focus on four key areas.

The first strategy of the 1234 framework focuses on making digitisation the “main axle,” and the use of technology as the core driver of new operations.

The second strategy involves the establishment of the two main frameworks of a corporate-grade operations framework and a services framework, with the goal of modularising business operations, data and products of the entire bank’s value chain.

The third strategy envisages the creation of three separate platforms for cloud computing, big data and artificial intelligence respectively, to serve as the “technical support” for the corporate-grade operations framework and the services framework.

“We have independently established two main platforms, one being the artificial intelligence foundational services platform, which encompasses facial recognition, fingerprint recognition, voice recognition and other widely used services,” said Xing Guiwei (邢桂伟),chief engineer of BOC’s information technology department according to a report from 21st Century Business Herald.

“The other [platform] is Bank of China’s corporate-grade big data platform, with the establishment of a general-use machine learning platform on the foundation of the big data platform.”

The fourth strategy focuses on the “four main areas” of innovative operations development, integration of operations and technology, establishment of technological capability, and technological systems and mechanisms.

According to Liu Qiuwan BOC will focus on the development of “28 strategic projects” as part of the fourth leg of its fintech strategic framework.

Xing Guiwei said that BOC will strengthen the tech capabilities of its staff, setting the target that 10% of BOC’s 300,000 strong workforce have tech backgrounds within 3 – 5 years, with an especially strong focus on product managers, data analysts, customer experience designers and internet security experts.

Guo Weimin (郭为民), general manager of BOC’s online finance department, said that the bank’s fintech initiatives are already helping to reduce the rate of non-performing student loans.

“In the past the non-performing ratio of student loans was quite high, with one reason being that students did not give adequate attention to their own credit standing, and a more important reason being that once students obtained employment, because loans were made at the location of their schools, after graduation we lost contact with them,” said Guo.

“These customers with whom we lost contact were very likely to forget to make repayments once we lost contact with them, even though they weren’t maliciously absconding from loans.”

Guo said that the use of big data has helped to reduce non-performing ratio student assistance loans, given that over 90% of student borrowers are willing to make repayments.

BOC is far from the only Chinese bank to step up its fintech adoption plans, with China Construction Bank launching the Jianxin Fintech Co., Ltd. (建信金融科技有限责任公司) in April with registered capital of 1.6 billion yuan.

“According to my calculations over the past four years six large, medium and small banks have established fintech companies or financial tech companies,” said Liu Qiuwan.

“Some of them have already achieved outstanding results, with Ping An Technology already becoming main business revenue for Ping An Group.