(Yicai) Sept. 24 -- State-owned Postal Savings Bank of China plans to integrate its direct banking arm into its main lender operations to reduce costs as mobile banking matures.

All businesses, assets, claims, debts, and other rights and obligations of China Post Huiwanjia Bank will be absorbed by PSBC, and contracts and legal agreements signed by the subsidiary’s customers will remain valid, the Beijing-based lender announced yesterday.

PSBC established a service framework centered on mobile banking as the primary service channel and greatly strengthened its comprehensive online service capabilities, the firm noted, adding that integrating the unit will help the bank use resources more efficiently and reduce operating costs.

Mobile banking has become increasingly important, as more than 20 commercial lenders have shut down or integrated their direct banking businesses in recent years. For example, Industrial and Commercial Bank of China has fully moved the core functions of direct banking, such as deposits and wealth management, to its mobile banking platform since 2018.

Direct banks were once highly regarded in the industry for their online nature and low-cost operations, market insiders told Yicai. However, as commercial lenders’ mobile apps have become increasingly popular, the value of maintaining direct banks as independent entities has declined, and the necessity for their existence has steadily diminished.

Editors: Tang Shihua, Futura Costaglione