November 9 marked the 9th anniversary of ICBC Bill Department – China's first institution dedicated to bill business. Over the past 9 years, the department has established itself as an integrated service provider in China's bill market, very unique and the strongest. Since its inception, ICBC Bill Department has processed a cumulative total of 1,290,000 bills involving an amount more than RMB 5 trillion and is proud to keep a zero-rate record on inward fraudulent bills, non-performing assets, capital loss and economic criminal cases. From the beginning of this year the department continues to maintain its growth trajectory and chalks up historic record profits of RMB 421 million and business volume of RMB 1.1417 trillion during the first three quarters.   

Today, ICBC Bill Department boosts a nationwide network of 8 branches in all the major regional bill centers in the country, covering Beijing, Tianjin, Chongqing, Guangzhou, Xi'an, Zhengzhou, Shenyang and Shanghai. The head office of the Department who acts as the "spearhead" is driving the 7 "backbone" branches and all subsidiaries under the branches' bill centers. Its footprint starts from Shanghai and spreads all over China supporting a business operation network that spans across different regions under the unified management from headquarter to branches. On this foundation, ICBC Bill Department has built a nationwide marketing and sales network covering 8 regional areas with nearly 500 corporate clients engaging in all kinds of bill transactions. The network not only cascades effectively the influence of an institution dedicated to bills in the market, but signals a transformation from individual-operated fiefdom towards a systematic, professional and centralized operation.

As business and services are gathering pace, ICBC Bill Department also plays an active role in promoting the healthy development of bill market in the country. Successive initiatives include the launch of "ICBC Bill Price Index", being the lead organizer for YRD (Yangtze River Delta) Joint Meeting on Bills and the advocacy of launching "YRD Bill Price Index" and Bill Acceptance Convention. A while ago, the department successfully closed the first nationwide rediscounting of inter-bank electronic bill, and therefore commands its home market dominance and becomes the linchpin of an innovative domestic bill industry.

According to the ICBC spokesperson, ICBC Bill Department has been successful in getting traction in the bill market amid increasingly challenging period nowadays. First of all there are two factors at work to speed up the change and reform. Innovation is the key to address the newest systems. A second factor is risk aversion and control focusing on the implementation of risk management and internal control. The two factors working complementary are fighting on two fronts in bringing the best delivery and most robust management result. Together they take "ICBC Bills" to the center stage as an excellent brand.

Full Scheme to Manage and Control Risk

ICBC Bill Department stands at the forefront of risk management practices since its establishment, adopting a management philosophy of "System before Business, Procedure before Operation" and a management model of "One System, One Flow". All business practices are performed under the constraint of system. All operations are standardized according to the flow. The Department has laid down tens of guidelines concerning operations, management and risk aversion system for all the bills services. They are guidance documentations related to buying and selling of bills such as Purchase Standard of Commercial Draft, Risk Indication and Control Guidelines on Bill Service, Compilation of Bill Contracts. The documentations enable different systems to cover all points of risk exposures in the service flows and steps which are easily fallen prey to moral risks caused by unethical staffs holding important positions. In every step staffs work efficiently, check and balance with each other. Every staff works in accordance with system to mitigate risk to a minimum.   

Risk management committee and internal control committee are set up to institute the management practices and put out the risk aversion requirements. The two committees are in charge of all important matters related to risk management under a professional team presided by Head Office's Chief Risk Officer with main vetting officers and bill checking staffs in branches. The roles in this vetting team work vertically in three separate processes of sales, vetting and approval. Meanwhile, the Department leverages on ICBC platform "Bill Management System (BMS)" to monitor the risk during the whole transaction process of bill service. This is a measure to avoid human errors and illegal conducts. BMS allows online journal entry whereby the Service Information System and the Accounting Audit System are connected to each other in real time. Under the control of the system, service processing and accounting entries are conducted synchronously in order to stop malpractices.
  　                 
Control Operational Risk by Further Increased Internal Control and Optimized Flow

From 2002, ICBC Bill Department introduced the international standard ISO9001: 2000 Quality Management System to strengthen the unified headquarter-branch risk management and internal control system. The result is one management platform that standardizes all the steps in the service flow. As stated in the ISO documentation, each step is seamlessly connected to the next to achieve "zero error". Incessant efforts are spent to improve the management of all bill operations. ICBC Bill Department passed the BSI certification for the year 2009 and became the first banking institution in China accredited with the ISO 9001:2008. The Department has established a solid foundation to control and prevent risk by dint of its process flows and standardized, centralized, modularized operations. From the day the department started operation until today, no loss has been incurred from operational risk.     

Business Process Restructuring (BPR) is one measure taken to increase the ability to control risk. Based on the quality management scheme, ICBC Bill Department re-assesses and re-designs critical service flows with an eye on the risk flows. The result is encouraging and paves the way for the set-up of a process bank. The Department emphasizes quality in managing the flows and has been successful in creating a market brand. By pushing forward standardized system flows and quality awareness targeting at efficiency, the department underscores its approach to control risk. Every year since 2006, ICBC Bill Department runs thorough check-up on all the systems inside and outside the department as well as the quality standard documentations. The Department is responsible to compile the System Manual and Quality Management Manual. The ultimate objective is to ensure sustainable development through the long-standing management process set under a revolving system of "system set-up– enhanced checking – strengthened assessment – increased execution capacity - stringent management – improved services."

Leverage Technology to Implement Rigid Control on Service Flows

ICBC Bill Department places IT technology on the top of the agenda as an effective measure to avert and control service risk. ICBC-developed platform "Bill Management System (BMS)" exercises computer rigid control during monitoring on the credit control to users, transaction approval and authorization control, and pricing of bill rate and calculation of interest. A bill, beginning from where it is originated, its structure and where it is directed, as well as assessment and alert on the risk, the whole process is monitored by BMS in real time. In the event of exceptional situation or change in risk, opinions are available anytime on the prevention and control of operational risk on the spot. Also included in the system administration are accounting factors as varied as stamps, test keys, vouchers and important devices. These are hardware controls implemented in "3 independent controls involving stamp, key and voucher". Enquiry System of Public Notices on Bills of Exchange and Public Control Information Vetting System are created for irregular announcements on customers that should be kept a close eye on. The two systems help to stop non-compliant bills or bills coming from un-trustworthy customers. The use of information system has effectively moved up the standard of risk management by controlling and mitigating risk using hardware.  

The ICBC spokesperson notes that starting from this year, there are rising complexities and uncertainties of economic and financial market across the world and in China. ICBC Bill Department has to face directly the challenge as well as opportunity against this market disarray. In view of this, new measures will be taken in an attempt to strengthen the image of this "Golden Shingle" of "ICBC Bills". That includes the optimization in the philosophy of risk management, the differential management on the products, increased focus on the risk management initiatives and upgrade of the risk management technological standard.