Recently, a national joint-stock commercial bank disclosed at the interim results conference that this year, the number of employees increased by about 1,500, of which 1,200 were new scientific and technical personnel. In addition, in terms of financial expenses, the annual science and technology budget has increased by more than 5% over the previous year.

The situation of this bank can be said to be the epitome of the accelerated digital transformation of the banking industry in recent years. The outline of the '14th Five-Year Plan' clearly stated that it is necessary to steadily develop financial science and technology and accelerate the digital transformation of financial institutions. Since the beginning of this year, People's Bank of China and China Banking and Insurance Regulatory Commission have successively issued the Financial Science and Technology Development Plan (2022-2025) and the Guiding Opinions on the Digital Transformation of Banking and Insurance Industry, which comprehensively put forward the principles, frameworks and objectives of the digitalization of financial institutions, and demanded that the overall level and core competitiveness of financial science and technology should be improved by leaps and bounds in 2025, and the digital transformation should achieve obvious results.

The competition among banks in the digital transformation has become increasingly fierce. It is noteworthy that, faced with the crushing advantages of large state-owned banks in scale, brand, science and technology, and talent reserve, a large number of small and medium-sized banks now have 'digital transformation anxiety'.

This anxiety comes from the pressure of cost on the one hand. Constrained by capital, small and medium-sized banks have limited total assets and liabilities and limited absolute profits. Digital transformation requires the most basic investment of hardware, software and personnel, but the high cost makes it difficult for some small and medium-sized banks to afford it. At present, many small and medium-sized banks themselves still face some problems, such as the improvement of corporate governance, poor asset quality and weak profitability. In the case that one's own problems are not well solved, one may go digital for the sake of digitalization, or expect to solve one's own problems through digitalization. In the end, the problems may not be solved, but a large amount of investment will be wasted, and the business loss will not improve.

On the other hand, anxiety comes from confusion about the direction of digital transformation. In the process of digital transformation, some small and medium-sized banks are divorced from their own business reality, imitating the scenes of Internet enterprises, hoping to get customers through traffic, but the result is aimless. There are also some small and medium-sized banks that rely too much on third-party platforms for drainage, and there are various problems and risks. Many organizations originally hoped to achieve overtaking in corners through digitalization, but they fell into the embarrassing situation of huge investment and little output.

Throughout the industry, there are only a few small and medium-sized banks that can build their own technology systems and realize digital transformation by their own strength. For a large number of small and medium-sized banks, without digitalization, they may lose their opportunities in the future competition, but blindly carrying out digital transformation may increase costs and aggravate operational difficulties.

We must be soberly aware that digitalization can't solve all problems. The digital transformation of banks is only an auxiliary tool in the process of helping to achieve business objectives, not the ultimate goal. Practice shows that only the digital transformation around the bank's own business characteristics and customer characteristics is the most effective. On the premise of steadily advancing business objectives, banks should gradually improve their digital capabilities and avoid putting the cart before the horse.

For most banks, it is also necessary to realize that digital transformation is a long-term process, which cannot be achieved overnight, nor can it be achieved in a hurry. You should cultivate your own business in a down-to-earth manner, and you can't always think about overtaking in corners. Nor can the banking industry turn digital transformation into 'equipment competition', blindly pursuing scale and neglecting risk prevention. Especially for small and medium-sized banks, the most important task at present is to improve the quality and efficiency of serving the real economy while building a risk dam. Banks should adapt to local conditions, further improve corporate governance, build the bottom line of risk, solve the anxiety in transition with down-to-earth development, and explore a digital transformation road suitable for their own characteristics.