How many banks are there in our country? Is it good or bad to have many banks?

When it comes to financial institutions, the most familiar and frequently dealt with ones are banks. In fact, in addition to banks, there are many other financial institutions that can be called banking financial institutions, such as financial leasing companies, auto finance companies, etc. Although we ordinary people have less contact with these institutions, they do exist in reality.

So, what kind of sparks will these banks collide with each other? Today, let's sort it out together and take you to understand some unknown industry secrets.

Hello everyone, I am Xiaoyin Brother, please pay attention to me, and I will tell you financial knowledge that ordinary people can understand every day.

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According to data statistics, as of December 2021, there are a total of 4,602 banking financial institutions in our country, including 3 policy banks, 5 state-owned large commercial banks, and 12 joint-stock commercial banks that we are familiar with. The largest in scale are rural commercial banks and rural banks, with 1,596 and 1,651 respectively. The remaining rural credit cooperatives, rural cooperative banks, private banks, foreign banks, etc., have different numbers, and the specific values are placed in the first comment of the comment area. Interested friends can go to check.

So many banks, is it good or bad for us ordinary people?

This question needs to be looked at from two aspects. First, let's talk about the benefits. For us ordinary people, having more banks means more choices for handling business, and having more financial outlets will make our daily life more convenient. At the same time, due to the competitive relationship between banks, it will weaken the monopoly position of banks. Banks will fully compete in aspects such as service, price, efficiency, network construction, and convenience, and ultimately benefit us ordinary people.

Excessive competition is also a "double-edged sword," which leads to the disadvantages of having too many banks that we will discuss next.Firstly, the internal competition among banks is quite severe. Currently, the performance targets set for banks are increasingly heavy, but the resources in the market are limited. With so many banks endlessly competing for a piece of the "cake," whether it be deposits, loans, or other financial products, they are all fighting fiercely in a cutthroat competition. However, when looking at the actual social value generated in the end, it seems there is not much to show for it.

Secondly, there is a serious issue of homogenization in financial products. In fact, with the current stage of technological development, the products of various banks are almost identical, whether in terms of product features or usage methods. The only difference might be in their names, and this ultimately leads to a massive waste of resources.

Lastly, the likelihood of financial risks is increasing. With such a large number of banks, there will be significant differences in aspects such as system construction, personnel quality, and risk control management. Although regulatory policies are gradually becoming stricter, the chances of problems arising are still relatively high.

So, how can we change this situation?

To address this issue, I personally believe that the following two points need to be achieved:

Firstly, gradually reduce the number of banks by shutting down or merging those with poor operational capabilities and forming larger banks. This process has already begun, with a trend of mergers among many small and medium-sized banks in recent years, and it may continue to increase in the future.

Secondly, differentiate the operations between banks by developing distinctive development paths based on the banks' own characteristics. Different banks should target different customer groups, delve into industry characteristics, and develop refined service strategies. This is the path for future development.In conclusion:

In summary, there are currently a large number of banks, which is due to historical development factors, and indeed, they have brought certain conveniences and benefits to us ordinary people. However, we also have to face the various negative effects brought about by the fierce competition among banks. Fortunately, the relevant national departments have also noticed this issue and have begun to address it step by step. It is hoped that in the near future, the various chaos in the banking industry can be completely resolved, reducing the occurrence of financial risk events.

So, do you think the current large number of banks is a good thing or a bad thing?

We welcome everyone to leave a message and comment, and let's discuss together.

That's all for this episode. If you still want to know more about financial management, please leave a message for me.