Although opening a checking account is still a novel idea for many Chinese, foreign technology companies are now bracing for a windfall in this niche market, seeking opportunities to help banks facilitate their businesses.
They believe the banks' personal check sector will take off in the near future despite the market's long-time lukewarm response to the service.
"China now is still in the transitional period to introduce personal checks . . . the business is about to take off within three to five years," said Paul Lim, chief technical officer, Asia-Pacific, for NCR, a world leading financial tech company.
"We are very positive about China's private check business, given the current market conditions here," Lim told China Business Weekly.
Checks in China, although widely used in the corporate world, have been long kept away from common consumers. Although some big cities such as Shanghai and Guangzhou have gradually allowed applications for personal checks, people do not take to the new payment option owing to the inconvenience and relatively high threshold for applications.
Banks also appear hesitant to promote personal checks because of the higher risks in transactions resulting from the lack of personal credit systems throughout the country.
Experts say with more advanced technical applications employed by domestic banks, barriers will gradually be removed, resulting in the wider use of personal checks.
Electronic check-imaging and processing technology will play a key role in enhancing banks' checking accounts as the new technology can help improve processing efficiency for the high volume of checks, experts say.
In China, checks are cleared through the central bank, the People's Bank of China, and its intra-city clearing centers.
According to Ruth Fornell, vice-president and general manager of NCR's payment solutions department, China's banks already handle a high volume of checks every day.
In Beijing alone, the clearing center handles more than 140,000 checks daily, and in Guangzhou, about 130,000 checks per day. A bank such as Industrial and Commercial Bank of China in Shanghai handles around 40,000 checks on a daily basis.
Experts expect check-imaging facilities to meet the growing demands of local financial institutions for imaging technology. Imaging technology can help banks create electronic storage instead of traditional microfilming of the physical items processed.
Image-assisted operations processing can also enable the adoption of Automatic Chop Verification (ACV) to further improve inward clearing processes.
The demand for imaging technology is likely to increase as the economy flourishes following China's entry to World Trade Organization.
In the longer term, the introduction of this technology will enable consumers to have access to images via Internet channels, and will assist in reducing fraud.
"Market trends strongly indicate image adoption is on the rise, and the industry is looking for technology that offers increased throughput, high quality and strong business economics," Fornell said.
"The introduction of the check-imaging product will play a strategic role in the advancement of China's check processing system and improve service offerings that only imaging can offer."
(China Daily April 12, 2004)
