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Last update:2017/07/11


Taiwan Financial Holdings
​1. Industry Overview

Taiwan's financial industry in recent years has been developing stably, and financial services firm have generally been in strong condition, but comparison baselines from the previous year were high and financial markets were volatile. As a result, Taiwan's 16 financial holding companies in 2016 posted a combined NT$266.956 billion in earnings after tax, down by 11.87% from the previous year, while average ROE was 7.95% and average ROA was 0.56%.
Development of ICT technology throughout the world and the arrival of the Big Data era pose challenges to traditional financial business models and approaches to business. Digitization has become a key factor affecting competitiveness, and rapid change in financial markets is also testing the adaptability of financial holding companies. In order to promote the development of financial markets, the government hopes that financial services firms will support innovative industrial transformation and meet the financial needs of public policy. The government also encourages financial services firms to actively develop innovative financial products and services while accelerating the development of digital banking, so as to expand the size of domestic financial markets and use innovative strategies to make Taiwan's financial industry more competitive. The competent authority has adopted deregulatory measures and continues to ease legal restrictions on the financial industry. At the same time, it is also working to make financial markets more secure and orderly, and has identified AML/CFT as a key focus of supervision. The competent authority intends to spur better implementation of risk management by encouraging financial services firms to use more personnel and resources to improve their compliance, internal audit, internal audit systems. In addition, in response to the government's New Southbound Policy, financial services firms will seize upon related business opportunities, continue strengthening their presence in Southeast Asian markets, take active part in and assist the efforts of Taiwanese firms to develop a new "blue ocean in economic and trade relations," expand the size of Asia-Pacific asset management markets, and improve the international competitiveness of Taiwan's financial industry.

2. 2017 Business Plan

(1)Business development plan: Coordinate with government policies; create more momentum for industrial growth​​

Help Taiwanese firms seize upon business opportunities connected with the New Southbound Policy and establish a presence in markets that have strong potential; help promote the development of innovative industries, meet related demand for funds, spur transformation and upgrading of domestic industrial structure, and contribute to development of the real economy; promote urban renewal financing and integrate departments in charge of retail banking, corporate finance, credit management, and trust business in order to provide a complete range of financial services; provide a good financial services environment and ample financing for support of youth entrepreneurship and development of small and medium businesses, thereby boosting impetus for innovation in domestic industries.

(2)Legal compliance: Harmonize with international practices; lead the industry in working to strengthen financial order

Abide by domestic and international supervisory regulations, work to cultivate and hire professional compliance personnel, and employ new financial technologies to strengthen our ability to identify and screen for suspicious transactions; use a principle-based approach in treating compliance with universally accepted financial industry values and principles as our guiding philosophy, work with peers in the domestic financial industry to build a collective self-regulatory mechanism, and share related knowledge and resources in order to strengthen financial order while rebuilding and deepening trust within international financial circles in Taiwan's financial services firms

(3)Innovation of services: Assist the efforts of Taiwanese industries to develop a new blue ocean in economic and trade relations.​​​​​​​

​Seek innovative development; actively improve digital financial services; continue adding and strengthening push one-time passwords (OTPs) and other mobile banking functions; devise plans for integration of customer-side digital banking services; install 24-hour self-serve smart fee payment devices; adopt centralized branch queuing systems; take a prospection-oriented approach; provide customers with integrated financial services that are forward looking, value-added, and customer-friendly, with an eye to using innovative financial technology to expand the scope of services, and improve service efficiency; take active part in and assist the efforts of Taiwanese industries to develop a new "blue ocean in economic and trade relations."

(4)Personnel Training: People-centered encouragement for continual improvement

Carry out the "People-Centered" concept by using cross-sectional, cross-spatial, and cross-time approaches; make full use of the abundant resources of the BOT Training Center to raise the level of training at each TFH subsidiary, improve the quality of human resources, and reap synergistic benefits through integration of education and training resources; launch a “Young Management Development program” to recruit and retain a new generation of managerial talent, thereby making the Group more competitive.

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(5​)Corporate social responsibility: Community service activities to provide both charity and cultural enrichment

Implement corporate social responsibility through continued promotion of the Guide Dog Affinity Card, which directs a certain percentage of purchases made with the card to the Taiwan Guide Dog Association for use in training guide dogs and creating an endowment to finance dog training; work together with the charity fund entrusted by BOT, provide long-term sponsorship for social service organizations, and provide material and financial support in a timely manner; elevate the Group's participation in corporate social responsibility to the level of culture by holding a Bank of Taiwan Arts Festival to support Taiwanese artists and collect their works in an effort to strengthen local art and create heightened social values.

3. Cross-Selling

(1)Cross-selling synergies

i. In line with the strategic objective of tapping into group synergies, TFH actively developed integrated products and services, built up its groupwide joint business development mechanism, set up a platform for integrated marketing among group subsidiaries, and held monthly meetings of the TFH Cross-selling Committee, which uses the "management by objectives" method to monitor implementation. And the Group used its joint business development and performance evaluation systems to bring about healthy competition and cooperation among the Group's subsidiaries, and to spur diversification of their business. The 2016 Plan for Integrated Marketing Among Group Subsidiaries covered the six principal business lines of corporate finance & bulk collections, wealth management, life insurance, investment of life insurance funds, securities brokerage, and securities underwriting. The subsidiaries used the platform to refer business to each other, and engaged in cross-selling of 16 of the Group's cross-sector products, and monitored the achievement of 25 plan targets. Quantifiable items sold via the cross-selling platform contributed NT$1.558 billion to the Group's profits in 2016, up by 30.92% over the figure for 2015.

ii. On 19 February 2016, the FSC amended the "Regulations Governing Cross-selling Among a Financial Holding Company's Subsidiaries," easing restrictions on the scope of securities eligible for cross-selling at a corporate group's business locations. In order to promote a diverse range of business activities and get better results from cross-selling in the securities business, TFH has applied with the FSC and obtained the latter's approval to use BOT cross-selling service counters to accept applications to open margin accounts. This will enable TFH to better integrate Group resources and reap greater benefits of synergy.

(2)Resource integration and cost reductions

TFH continued to promote its groupwide shared operating platforms project; effectively integrated and used logistics resources; and used shared operating platforms for eight major shared business operations (information operations, education and training, legal affairs, property management, community service promotions, purchasing operations, financial and economic information exchange, and human resource exchange) to reap greater benefits from centralized management and professional specialization. TFH continued working in 2016 to make integrated use of the Group's information resources, to upgrade the functionality of the management platform for the Group's basic IT framework, and to carry out leasing and purchasing of out-of-house information sources. Our logistics platform handled 3,223 cross-subsidiary operations in 2016, reducing measurable operating costs over the course of the year by NT$35 million, thus reducing operating costs by tapping into group synergies.​​