Research on the Operational Transformation and Development of Commercial Banks Under the Trend of Narrowing Interest Margins

Abstract

This paper reviews the transformation experiences of international banking sectors and analyzes the core challenges faced by China’s banking industry amid the ongoing trend of narrowing net interest margins (NIM), along with corresponding strategies. It introduces Zhejiang Province’s “Financial Consultant System” as a practical case study of comprehensive transformation. The case demonstrates that by establishing a new ecosystem characterized by public welfare leadership and integrated services, banks can shift from a “hunting-style” scale-expansion model to a “farming-style”value-creation model, effectively enhancing customer stickiness, expanding revenue sources, and advancing risk management. The case shows that by building a new ecosystem featuring public welfare leadership and comprehensive services, banks can realize the transformation from a “hunting-style” scale expansion model to a “farming-style” value creation model, effectively enhancing customer stickiness, expanding income sources, and advancing risk management.