china merchants bank case study

China Merchants Bank (C): Building a distinct corporate culture

The China Merchants Bank (CMB) was the first non-state-owned bank in China, and thus considered a trial case for China’s financial reforms. Founded in 1987 by the China Merchants Group, CMB had managed to survive, grow and compete with the large state-owned banks. It had successfully created a corporate culture of high-quality services and innovations over the years. This four part case series describes the transformation of CMB under Ma Weihua’s leadership beginning in 1999. By 2007, CMB was the most profitable bank in China, but new challenges still lay ahead. How to maintain the edge in a changing competitive landscape? How to avoid the usual traps that doom financial institutions eager to expand in tough times?

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China Merchants Bank in Transition

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China Merchants Bank: Business Model Transformation Harvard Case Solution & Analysis

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The director and CEO of China Merchants Bank (CMB) had driven the institute by making two turnarounds to sustain capital, develop culture and to meet the financial requirements of new ventures and customers in China, during the last ten years of rapid evolution. Despite successes, the shareholders of CMB did not find the desired returns in the stock market and the CMB’s capital limitation was biting. The chairman encountered several challenges while developing the strategic plans for CMB because of increasing government regulations, an uncertain global economy, and slower growth in the local market.

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China Merchants Bank

A top-ranking commercial bank achieves continuous application availability with stratus® ftserver® systems, established in 1987 in shenzhen, china merchants bank (cmb) is china’s first joint-stock commercial bank and a pioneer in promoting chinese banking industry reform. over the past 24 years, cmb has grown from a small bank with a net capital of 100 million yuan, one branch, and 30 employees to a nationwide commercial bank with a net capital of 140 billion yuan, total assets of 2.6 trillion yuan, over 800 branches, and more than 50,000 employees. now ranked among the world’s top 100 banks, cmb has earned its position as the most influential commercial bank brand in china through continuous financial innovation, quality customer service, prudent management and strong business performance., the challenge.

CMB offers a wide range of personal and corporate financial services, including Internet and mobile banking, loans, multi-function debit cards, dual-currency credit cards, and wealth management, to a diverse customer base. As it continues to grow and expand, CMB strives to deliver exceptional customer service while rigorously managing its operating costs to drive profitability.

With customers demanding around-the-clock access to secure, real-time financial transactions across multiple delivery channels, even the briefest period of unplanned system downtime could negatively affect thousands of customers, damage CMB’s reputation and result in potential revenue losses. CMB decided to establish its server infrastructure with state-of-the-art, fault-tolerant servers in order to achieve continuous availability of its virtualized core banking applications.

“CMB has built its reputation on providing secure, reliable banking transactions to customers without compromise. Stratus ftServer systems were the only platform that could provide proven maximum availability for high-volume transactions and multi-channel financial services delivery at a low total cost of ownership.” Mr. Linli IT Department of head office China Merchants Bank

The Solution

After an in-depth evaluation process, CMB selected Stratus ftServer systems instead of IBM or HP servers to create an open systems architecture that enables greater ease of use, lower maintenance costs, and continuous availability. The bank purchased Stratus ftServer 6400 systems—all of which run RedHat® Enterprise Linux®, Oracle RAC, and VMware vSphere® virtualization software. Some of the ftServer systems are installed in CMB’s primary data center in Shanghai and the others are located at a disaster recovery site in Shenzhen to support the bank’s business continuity plan that.

The ftServer 6400 systems prevent downtime and data loss for transaction-intensive applications while eliminating the costs and complexity involved in deploying and managing alternative high-availability solutions. The fault-tolerant ftServer architecture eliminates single points of failure—which is especially important in virtualized environments—and addresses the hardware, software and serviceability issues that can interrupt system operations and lead to critical data loss or corruption.

Advanced lockstep technology, automated monitoring and proactive management and service combine to provide an always-on solution that delivers unmatched availability and low TCO. The ftServer system’s duplex hardware components process the same instructions at precisely the same time. If a component fails, its partner simply continues normal operations—without downtime or data loss. The Automated Uptime Software Layer™ monitors more than 500 system components and sensors to identify, handle and report faults before they impact system operations. In the event that a component fails, the ftServer system’s hot-swappable customer replaceable units are automatically ordered and easily installed while applications continue to run without interruption.

“Since deploying our virtualized banking applications on ftServer systems, CMB has experienced zero downtime. Continuous system availability enables us to meet customer expectations for service, quality, and reliability while protecting against revenue losses.” Mr. Linli IT Department of head office China Merchants Bank

The Results

Since installing its ftServer systems in May 2014, CMB has experienced zero downtime of its core banking applications, successfully processing customer financial transactions through its multiple delivery channels 24/7/365. Delivering continuous availability in a cost-effective, easy-to-maintain platform, ftServer systems have enabled the bank to:

Protect financial transaction processing applications with an always-on operating environment
Detect potential problems and proactively take action before downtime becomes an issue
Avoid revenue losses due to banking and trading system interruptions
Uphold its strong reputation and maintain high levels of customer satisfaction
Meet China Banking Regulatory Commission (CRBC) standards for system availability

In addition, the fully scalable ftServer platform will easily accommodate CMB’s anticipated network and transaction growth to provide high performance and continuous availability into the future.

About Stratus Technologies

Stratus Technologies’ solutions enable rapid deployment of always-on infrastructures, from enterprise servers to clouds, without any changes to your applications. Stratus products (software and servers) combined with Stratus people, enable customers to prevent downtime before it occurs, enabling uninterrupted 24/7/365 performance of essential business operations.

To learn more, visit www.stratus.com .

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China merchants bank enhances operational efficiency with ibm it operations analytics software.

Functional Applications - Computerized Maintenance Management Systems (CMMS)
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The deployment of IBM Operations Analytics Log Analysis software transformed the bank's IT operations from reactive to proactive. The software's early warning capabilities and log analysis functions improved the service quality provided by the bank's IT team. The bank was able to distinguish key events from the high volume of standard IT infrastructure-related events, which helped in closing the loop on IT operations and maintenance. The software integrated all business-related infrastructure information, which accelerated the process of diagnosing and analyzing problems and their root causes. In some cases, the bank was even able to predict issues before they emerged, thus enhancing operational and maintenance efficiency.
The IBM solution facilitated a 98 percent decrease in problem query cycle times.
The solution significantly reduced the mean time to recovery.
The bank was able to speed up troubleshooting processes.

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