Yucheng Technologies Limited: Banking on the future

Since the Chinese government relaxed restrictions and allowed foreign financial institutions to enter China's retail banking market in December 2006, a world of opportunities have opened up for banks, both international and domestic.

China's increasingly liberalized financial services sector has attracted investment from global powerhouses such as Bank of America Corporation (NYSE: BOA), Citigroup Inc. (NYSE: C), HSBC Holdings (NYSE: HBC), Royal Bank of Scotland Group (NYSE: RBS) and Standard Chartered PLC (LON: STAN) — some have set up shop under their own banners, while others have purchased stakes in successful Chinese banks.

Stepped up competition from international banking rivals in a fast-growing market has left Chinese banks with no choice but to upgrade. Home-grown banks are now expanding their financial offerings and beefing up their IT infrastructure to keep up with highly-experienced foreign competitors vying for a piece of the more than $4 trillion in deposits held in China (and the growing demand for bank accounts, credit cards, mortgages and wealth management services among more affluent Chinese consumers).

One company that sees its future fortunes in the Chinese banking industry is Yucheng Technologies Limited (Nasdaq: YTEC), a leading information technology and outsourcing solutions provider. Yucheng provides services including IT consulting, system integration, financial software development, telephone and Internet banking, call center installation and support and risk management solutions to some of the largest banks, insurance companies and securities firms in China.

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