Digital finance is fast and steady.
"Build a 100-billion-level AI (artificial intelligence) large-scale model technology system, create financial image character recognition products, and realize batch credit granting and digitalization of the whole process after lending …" In the 2023 annual report published by listed banks, in addition to the business performance indicators that have attracted much attention from the market, the financial technology investment of many banks increased year-on-year, the digital transformation and upgrading progressed steadily, and the exploration of large-scale model technology research and development and application scenarios increased significantly, laying a solid foundation for writing a big article on digital finance.
Digital transformation has achieved initial results.
The disclosed annual reports of listed banks in 2023 show that more than half of the banks have achieved a year-on-year increase in financial technology investment. From the perspective of the "big four banks", the investment amounts of Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China and China Construction Bank in 2023 reached 27.246 billion yuan, 24.85 billion yuan, 22.397 billion yuan and 25.024 billion yuan respectively, up by 3.9%, 7.06%, 3.97% and 7.45% year-on-year.
In terms of joint-stock banks, in 2023, two banks invested more than 10 billion yuan in financial technology. China Merchants Bank invested 14.126 billion yuan in science and technology, although it decreased slightly by 0.3% year-on-year, but it is still the institution with the largest amount of investment among joint-stock banks. CITIC Bank’s investment in financial technology reached 12.153 billion yuan, up 38.91% year-on-year, and it was the listed bank with the largest year-on-year growth.
"As a key force to promote the digital transformation of banks, financial technology is in an important strategic position in most listed banks. However, at present, the development of digital technology itself and its application in the financial industry require more research and exploration, and it is necessary to increase investment in financial technology. " Lou Feipeng, a researcher at China Postal Savings Bank, said that it is of positive significance for the banking industry to accelerate the digital transformation by increasing investment, so as to enhance its own market competitiveness and service level.
With the increasing investment in financial technology, many banks have made remarkable achievements in the digitalization process in 2023, especially in the key field of scene construction.
According to the annual report of ICBC, around the goal of "Digital ICBC", we will speed up the construction of a digital financial service system that is compatible with the modern economic system, and innovate a new model of digital financial development with the main line of building a platform, improving capabilities, expanding scenarios and building ecology. In 2023, digital business accounted for more than 99%. Relying on corporate online banking and mobile banking, we will build a digital financial service platform that integrates e-cloud, and launch services such as specialized and special new service areas and Pratt & Whitney areas for exclusive customers to provide customers with ecological services that cover the integration of financial and business scenarios.
China Merchants Bank increased its investment in science and technology, comprehensively promoted digital remodeling around online, data-based, intelligent, platform-based, ecological and so on, gradually established an ecological circle of financial services, and explored the application of artificial intelligence scenarios. Intelligent applications have replaced more than 17,000 full-time manpower in intelligent customer service, process intelligence, quality inspection, conch RPA+ (robot process automation) and other scenarios.
Many banks mentioned in their annual reports that they should improve their technology and finance system by optimizing their organizational structure. For example, Industrial Bank set up a digital operation department, actively explored new modes of digital operation, and strived to get through the "last mile" from digitalization to productivity; China Postal Savings Bank optimized and adjusted the organizational structure of the information technology section of the head office, and renamed the Information Technology Management Committee under the senior management as the Financial Technology Committee; Reorganize the Information Technology Management Department and the Financial Technology Innovation Department into the Financial Technology Department; Rename the data center as an operational data center, promote the transformation of science and technology governance structure, and strengthen the overall leading role of information technology.
Accelerate the application of large model technology
In 2023, with the big model tsunami wave set off by ChatGPT sweeping the world, AI big model technology has become the focus of exploration and layout in many industries, and banking is no exception.
The reporter noted that six large state-owned banks and a number of joint-stock banks such as CITIC, China Merchants and Xingye disclosed the research and development and application of the big model field in the 2023 annual report. AI big model technology may become an "accelerator" for the digital transformation of financial institutions.
China Construction Bank mentioned in its annual report that it will continue to strengthen research on key core technologies. Independent research and development of artificial intelligence platform, and form a comparative advantage in the fields of computer vision and intelligent voice, and implement the "Ark Plan". The big data platform covers over 30,000 physical nodes, and the foundation of data governance is further consolidated. The annual report of Agricultural Bank of China revealed that relying on the artificial intelligence innovation laboratory, the functions of pre-research and incubation of large-scale model technology, online answer recommendation of customer service knowledge base and auxiliary search of knowledge base were accelerated.
CITIC Bank has built a CITIC big model platform with integrated software and hardware, completed the deployment of a 100 billion-level open source big model, and explored scenarios such as landing code generation and intelligent operation. China Merchants Bank seized the opportunity of certainty of the big language model to develop the construction and application of the big language model. On the one hand, we actively strengthen the construction of large models, introduce large models with 100 billion parameters, tune, train and adapt the scenes in the industry with our own corpus, follow up the development of open source large model technology, and develop large models with 100 billion parameters in professional scenes. On the other hand, explore the application of big model in retail, wholesale, middle and back office. At the same time, build a large model experience platform, access to a number of domestic mainstream large models.
In the view of Wu Dan, a researcher at China Banking Research Institute, at present, banks have increased their application and exploration of big model technology, and strengthening their customer service capabilities with financial technology empowerment is conducive to enhancing the core competitiveness and customer attraction of banking business. In the context of the current narrowing of net interest margin, it is also beneficial for banks to accelerate the pace of digital transformation and enhance their non-interest business capabilities such as smart investment and care, and to seize market share and enhance profit margins.
"The smart big model has strong data capture, text understanding and calculation and analysis capabilities, which can improve the existing service quality and efficiency of banking institutions on the basis of deeply tapping the potential value of big data." Wu Dan said that it is very important for the banking industry to accelerate the research, development and application of technologies in the field of big models, which is also the key link to do a good job in digital finance.
Broad space for development
In recent years, financial management departments have promoted the digitalization process of China’s financial industry as a whole, and taken various measures to encourage the innovation and application of financial technology to enhance the efficiency of financial services to the real economy. In January 2022, the People’s Bank of China issued the Financial Science and Technology Development Plan (2022-2025), which proposed to promote the digital transformation of finance with high quality and improve the modern financial system adapted to the development of digital economy.
On January 26th of the same year, the former General Office of China Banking and Insurance Regulatory Commission, China issued the Guiding Opinions on the Digital Transformation of Banking and Insurance Industry, proposing that by 2025, the digital transformation of banking and insurance industry will achieve remarkable results. Digital financial products and services have been widely popularized, financial innovation based on data assets and digital technology has been practiced in an orderly manner, the development ability of personalized, differentiated and customized products and services has been significantly enhanced, and the quality and efficiency of financial services have been significantly improved.
In the field of securities, in June, 2023, China Securities Industry Association issued the Three-year Improvement Plan for Network and Information Security of Securities Companies (2023-2025), encouraging qualified brokers to make full use of new technologies to actively promote the construction of a new generation of core systems and carry out the transformation and upgrading of the technical framework of core systems, and clearly stated that the average investment in information technology of brokers should not be less than 10% of the average net profit or 7% of the average operating income from 2023 to 2025.
Experts believe that under the background of the new round of scientific and technological revolution and the in-depth development of industrial transformation, deepening digital transformation is an inevitable choice for the financial industry to practice the innovation-driven development strategy. Under the continuous guidance of policies, financial institutions will continue to increase the exploration of digital applications represented by large-scale model technology.
The Report on the Application of Generative AI in Financial Industry in 2024 jointly released by Tsinghua University Institute of Economics and Management and Du Xiaoman shows that financial institutions can carry out more product innovation, provide more effective credit support, underwriting claims and market financing for the real industry, release huge financial data value, improve the financial service level of the real economy, and promote the innovative development of financial institutions themselves, and move towards the ranks of powerful financial institutions.
For the banking industry, Wu Dan suggested that the digital transformation of the banking industry should focus on intelligent, personalized, universal and other key directions. Using AI technology to accurately identify customer needs and provide flexible and diverse personalized services is conducive to improving customer experience and customer stickiness. Use financial technology to extend financial inclusiveness and provide more convenient financial services for small and micro enterprises at a lower cost.
"It is expected that the banking industry will make better use of data elements, improve the infrastructure of digital finance development, enrich the application of digital finance scenarios, and increase the exploration and practice of digital finance development security, so that digital finance can empower technology and finance, green finance, inclusive finance and pension finance to better meet economic and social development and people’s demand for high-quality financial services." Yan Feipeng said. (Economic Daily reporter Ma Chunyang)