The Impact of the Financial Holding Company Law on Strategies of Banking Industry

• Main Author: 沈玉珮
• Other Authors: 劉 原 超
• Format: Others
• Language: zh-TW
• Published: 2004
• Online Access: http://ndltd.ncl.edu.tw/handle/36278261005263913430

碩士 === 大葉大學 === 事業經營研究所 === 92 === Since the liberalization of banking industry in 1991, there are 16 new banks established, thereafter the competition deepened. Due to the small scale of financial market in Taiwan, the banking industry fell into vicious competition and the margin for the banks shrank and non-productive loan increased. The results are serious financial problems. At this time, following the liberalization and globalization of international economy, Taiwan was admitted into WTO in January 1, 2002. In order to meet the challenge of powerful competition from international financial groups, the Government had to solve domestic financial problem, integrate financial institutes as the first priority. Therefore, as early as June 27, 2001, six Laws for financial were passed. Among them, the Financial Holding Company Law exercised tremendous impact on the financial industry. The purpose of enactment was to guide the financial system of Taiwan to “concentrate holding, expand organization, diversify operation and make the supervision transparent”, so as to promote the competitive capacity and internationalization of financial institutes. Since the enactment of Financial Holding Company Law, there are 14 financial holding companies formed and domestic financial market remapped, also the operation modes of banking industry were changed. This study is intended to find out the influence the financial holding company system over the operation of banking industry in Taiwan through gathering the financial system development of advanced countries and the reality of current financial market in Taiwan. Fubon Bank, a member of Fubon Financial Holding, is taken for case study through in depth interview with the senior managements of Fubon Financial Holding and Fubon Bank. By analyzing data gathered through the process described above, the conclusion of this study is induced. According to the results of this study, financial holding company system is a new trend of world financial system and the financial commodities are in the era of globalization and diversification. The financial commodities of conventional banks are unable to meet the needs of customers─making the diversification of banking operation a trend. Under the financial holding system, the banks can cross selling diversified financial commodities of the members of financial holding company to satisfy customers with one-stop shopping services, and in the same time, effectively employ resources to reduce cost. It is equipped with efficiency and advantage of scale economy much more than conventional independent banks. This leads many banks opted to join financial holding companies, which accelerated the merge of banks indirectly. The financial holding company system has changed the operation modes of banking industry. As the present marketing focuses and directions of operation are still highly homogeneous, it is the suggestion of this study that banks shall first adjust their own substances and find out the unique position and the operation mode and actively develop e-banking services, as well as joining an appropriate financial holding company to be able to survive in the new era of a financial holding company trend and to find new opportunities.