Chinese banks are buying new IT systems "across the board," for areas such as core banking platforms and risk management operations, as well as physical infrastructure systems such as ATMs, says McKinsey & Co. partner Chris Ip, who heads the New York-based management consultancy's greater China IT practice.

Until now, Chinese banks have operated in a fundamentally different way from banks in the U.S. In many Chinese banks, each branch borrows and lends money almost as if it were a stand-alone business, says Colin Lawrence, risk enterprise and transformation leader for greater China and the Asia-Pacific region at IBM Global Business Services. For example, if a branch needs money to issue a loan, it will turn to the interbank market -- where Chinese banks lend money to one another -- and pay for the privilege.

"If each branch sets its own prices and lends its own money, it's obviously inefficient," Lawrence says. "By having a common system, you can combine all the deposits and all the loans from the entire bank, reducing the need to go to the interbank market."

One organization that appears to have gotten ahead of the wave is Bank of Communications Co., the fifth-largest bank in China. In August, it completed a project to centralize data for its retail operations, with the help of Sterling Commerce Inc., a Dublin, Ohio-based IT consultancy.

Working with a Western partner is a common practice among Chinese banks. Bank of Shanghai, for example, hired Hewlett-Packard Co. two years ago to build a standards-based service center that reduced the costs and processing time of online transactions. HP in turn worked with Temenos Group AG, a provider of banking systems in Geneva.