Improving self-service banking services could help the banks become more competitive against foreign rivals, experts suggest.

A series of market-savvy techniques - such as advertising via automated teller machines (ATMs), unmanned banking service centers and extended ATM functions - could help domestic commercial banks improve services, reduce costs and strengthen relations with clients.

That, experts say, would also help the institutions fend off future competition.

Acknowledging the improvements could be accomplished by using the banks' internal computer systems, the experts said commercial banks should step up efforts to have all services in place before foreign banks increase their presences in China.

Banks have been reluctant to build more branches and outlets, while self-service banks - with ATMs replacing counters and tellers - have become a new way to extend services both geographically and chronologically.

Jiang Jianqing, president of the Industrial and Commercial Bank of China (ICBC), said earlier this month his bank had streamlined its nationwide networks of 47,000 outlets - to 28,000.

ICBC, China's largest State bank, is poised to embrace new self-service technologies with its recent database integration, said Zhao Bin, chief engineer of ICBC's branch in Central China's Hubei Province.

After three years of database integration, ICBC established two data processing centres in Beijing and Shanghai in late October.

"With infrastructure improving, the bank will gradually introduce more self-service banking technologies," Zhao said.

Li Yangyong, deputy managing director of the Bank of Communications' Wuhan branch, said his bank plans to open five to 10 self-service banks in the city next year.

Promoting self-service banking among general consumers concerns domestic banks and self-service technology vendors, Zhao said.

NCR, the world's largest self-service solutions provider, last week announced its new office in Wuhan, capital of Hubei Province, had begun official operations.

That marks the company's first foray into Central China.

"China has significant potential for further growth, considering the country's low penetration and usage of ATMs," said Delton Yueo, vice-president of NCR's financial solutions division in the Asia-Pacific region.

China has about 50,000 ATMs currently in use, or about 40 per 1 million people. The United States, meanwhile, has more than 1,000 ATMs per 1 million people.

NCR serves China's major banks with a 40 percent market share.

(Business Weekly December 24, 2002)