Bank of Communications' retail transformation enters the deep-water phase

On February 27, the Bank of Communications announced that the Board of Directors has approved the “Proposal on Deepening the Reform of the Retail Sector’s Institutional Mechanisms”;

The implementation of this decision signifies that this state-owned major bank’s organizational restructuring and strategic upgrade in retail banking have entered a substantive phase.

Against the backdrop of macroeconomic cyclical fluctuations and widespread pressure on net interest margins in the banking industry, the role of retail banking as the “ballast” of commercial banks is increasingly prominent. This major move by the Bank of Communications is not sudden but a natural extension of its ongoing retail transformation strategy in recent years.

Looking back to 2025, the bank’s pace of retail deployment has significantly accelerated:

At the mid-year performance briefing in 2025, the management explicitly stated to the market that establishing a Digital Operations Center was a major reform initiative for that year;

This strategic positioning elevates “digitalization” from merely technological empowerment to a core driver of retail business operations, marking the bank’s attempt to reshape the underlying logic of retail banking through technology.

Accompanying the organizational restructuring are intensive personnel changes. According to publicly available information at the end of 2025, the bank has completed the integration of its personal banking segment. The newly established Digital Operations Center has been merged into the Personal Financial Services Department, forming the “Personal Financial Services Department / Consumer Rights Protection Department / Digital Intelligence Operations Center,” with new leadership appointed.

From industry practice, retail transformation often relies on both structural and personnel adjustments.

By deploying capable frontline personnel with rich experience and digital vision, the bank aims to inject execution power into the new retail framework;

The formal approval of the “Proposal on Deepening the Reform of the Retail Sector’s Institutional Mechanisms” by the Board can be seen as a institutional confirmation and comprehensive enhancement of a series of reforms since 2025, including the establishment of the Digital Operations Center and the integration of the personal banking segment.

Deepening reforms of the institutional mechanisms often involve reshaping internal利益格局, and the successful advancement of this proposal demonstrates a high level of internal consensus on the urgency of retail restructuring.

This retail reform by the Bank of Communications may have profound implications for the bank’s internal efficiency and future asset-liability structure:

First, improving internal collaboration efficiency. Traditional retail banking often faces departmental silos and data islands; centering around the Digital Operations Center is expected to break down these barriers, enhancing overall branch efficiency and per capita productivity;

Second, reconstructing customer operation models. In an environment where traffic dividends are peaking, leveraging precise user profiling and data analysis to deepen wealth management needs of existing customers will help expand retail AUM (Assets Under Management);

Third, providing a stronger safety cushion for the bank to withstand the narrowing of interest margins. If this institutional reform can streamline internal logic and achieve dual improvements in retail fee income and profit contribution, the bank’s resilience in asset quality and profitability will be further strengthened.

However, streamlining mechanisms is only the first step.

The retail transformation of commercial banks is a marathon that tests endurance. In the current complex and volatile financial environment, with fierce homogeneous competition among peers, whether the bank’s new retail structure can quickly translate into steady growth on the financial statements, and whether digital operations can truly address customer pain points and create differentiated service advantages, still requires time to verify.

For the Bank of Communications, the approval of this proposal is a starting gun; the real test lies in the granularity of subsequent strategic implementation and the sustainability of refined operations.

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