Core Viewpoint - The low interest rate environment poses significant challenges for the banking industry, particularly in terms of net interest margin compression, which directly impacts profitability [1][2]. Group 1: Challenges and Strategies - The banking sector faces pressure on profitability due to declining net interest margins, which are a primary source of earnings [1]. - Banks are encouraged to diversify operations and expand non-interest income to mitigate the impact of low interest rates [1]. - Adjusting business models is essential, including optimizing asset-liability structures and controlling funding costs to enhance asset pricing capabilities [2]. Group 2: Risk Management and Business Expansion - Banks should focus on precise customer targeting and business segmentation to improve profitability rather than solely relying on increasing credit and deposits [2]. - Enhancing risk management capabilities and appropriately allocating short-term and long-term assets is crucial, with a focus on emerging sectors like technology and green finance that still have growth potential in a low interest rate environment [2]. - Financial institutions must actively expand comprehensive business operations and diversify income sources beyond traditional lending, including bond underwriting, investment, wealth management, and foreign exchange markets [2]. Group 3: Regulatory Considerations - Regulatory policies and assessment mechanisms should emphasize differentiated competition among financial institutions, recognizing the unique challenges and advantages of various types and sizes of institutions [3]. - Tailoring regulatory and assessment indicators based on the characteristics and strengths of different institutions can facilitate specialized development in niche markets [3]. - Allowing market-based pricing for certain services can enhance the efficiency of financial institutions and strengthen the resilience of the financial system [3].