Bank of China
Bank of China only set up its global transaction banking department in 2018. But it was still the first and the only one among China’s big four – Agricultural Bank of China, Bank of China, China Construction Bank and the Industrial and Commercial Bank of China – to do so.
Having integrated its transaction banking services into one department, Bank of China is on its way to becoming a formidable competitor to other joint-stock commercial banks, most of which ventured into this area much earlier.
Bank of China was set up to be a dedicated foreign exchange and trade finance bank in 1912. But over the years the bank has evolved far beyond that initial mission and it now offers a full suite of transaction banking products.
Many of Bank of China’s offshore subsidiaries have also set up their own transaction banking departments, mainly targeting Chinese companies that are expanding overseas and Fortune 500 companies.
The bank has been quick to adopt new technology. With the help of facial recognition and big data, it has streamlined the corporate account opening process so that it only takes 30 to 40 minutes rather than days. It also demonstrates innovation with its ‘BOC Bill E- discount’ product to help micro, small and medium-sized enterprises with online bill discounts.
As a result of these efforts, the number of corporate internet banking clients rose 18.7% to reach 4.6 million by the end of 2019, according to Bank of China’s annual report. Its transaction volume also surpassed Rmb200 trillion ($28 trillion).
The bank maintained a decisive advantage in what it does best: international trade settlement and renminbi cross-border payment services. In 2019, the bank’s international trade transaction volume reached $5.2 trillion and its cross-border renminbi payment volume hit Rmb7.32 trillion. That puts it comfortably in first place onshore for both services.
Bank of China’s focus on transaction banking may be relatively recent, but it has already gathered serious momentum. It should be seen as a sterling example for China’s other large state-owned banks.