The long, long queues at branches of domestic banks have caused many customers to complain and prompted lenders to seek other channels and avenues to retain their clients and boost efficiency.
E-banking
China's e-banking services, which started in 1997, now offer a wide range of transactions including bank account inquiries, remittance and trading funds.
At the end of June, 45 banks including domestic and foreign players have launched online banking services. It is estimated by China Financial Certification Authority that there are 74.95 million online-banking users in China, with average growth doubling annually in the past five years.
It is estimated that they transacted 95 trillion yuan (US$12.6 trillion) via online banking in 2006, a surge of 81 percent from a year ago.
More banks are taking advantage of the growth to invest in online services. Fujian Province-based Industrial Bank, for instance, teamed up last month with Chinapay, a China UnionPay affiliate, to boost its trading of funds online.
The enthusiasm for trading funds is rising amid the country's booming stock market. Industrial Bank offers funds from more than 50 fund managers to woo its clients on its online banking service. Other lenders, such as China Merchants Bank, also offer the service. China Construction Bank offers its customers the convenience of buying air tickets via its online service.
But challenges abound for the rapidly developing online banking service in China, and one of these concerns security. In a survey made by CFCA, 91 percent of potential e-banking users said they are concerned about the security of their data and transactions online. News of hackers stealing clients' information and password through Websites resembling those of banks is not uncommon.
But banks are using new technology to fight the hackers.
Banks offer portable security devices or tokens, which users have to press to get a four or six-digit code, to fight the hackers. These tokens serve as an added layer of security for online banking.
Mobile point-of-sale
China UnionPay, the country's sole bank card transaction system operator, is boosting the mobile point of sale coverage in Tianjin and plans to expand the service in other cities.
Its Tianjin branch offers the service as a trial. Residents can pay water and gas charges with their bank cards at the mobile POS machine. It's a popular service in the northern city with about 1.62 million residents using the POS machine to pay their gas fees while 700,000 have paid their water charges via this method as of the end of June. About 80 percent of families in Tianjin are able to pay for their gas usage via this channel while 75 percent use this facility to pay for water. It is expected that the mobile POS service can cover all of Tianjin by the end of this year.
Convenience stores
Shenzhen Ping An Bank Co will team up with 10,000 convenience stores of the Lianhua Supermarket Holdings Co in Shanghai and Beijing this year to accept credit card payment as it has a limited network. The bank is one of the first to tap the convenience store network in China. About 1,000 stores started accepting Ping An Bank's credit cards at the end of September, thus giving the bank's clients another payment channel.