Under the agreement, Yucheng will deploy the necessary hardware and its e-banking solutions under an ASP model, which will allow subscribing banks to leverage shared processing infrastructure to enable processing of online banking transactions, thereby expanding the range of services offered to their end customers. CFCA will host and maintain the e-banking platform to ensure the highest level of transaction security and service availability. In exchange of the services, clients are expected to pay a fixed annual fee for hosting and maintenance, as well as to share with Yucheng and CFCA revenues generated through transactions on the ASP platform. As part of the agreement, Yucheng will also provide customization to the ASP platform per request of the clients, and is expected to receive fees in relation to such customization.

The platform will allow banks to avoid costly dedicated infrastructure, as well as provide them with best-in-class applications, support and maintenance, together with the highest standard for transaction security in China today. With the mission-critical nature of this function, subscribing banks will save on the recurring cost of qualified maintenance staff and system redundancy. With this platform, city commercial banks and city/rural credit unions can avoid necessary up-front capital expenditures and quickly acquire the capabilities for online accessibility for their customers, rather than risk losing them to the larger banks who have dedicated in-house online banking platforms.

As of the end of 2006, China's banking industry consisted of 5 national commercial banks, 12 joint-stock commercial banks, 115 city commercial banks and more than 19,000 city/rural credit unions and other financial institutions. As of today, very few of the 19,000 smaller banking institutions in China provide e-banking services to their end-customers.

Mr. Weidong Hong, the CEO of Yucheng stated, "We are excited to introduce our e-banking ASP platform and our partnership with CFCA. As a commitment to better serve the city commercial banks and city/rural credit unions in China, we are now offering our market-leading e-banking solutions on an ASP platform to significantly reduce the total cost of ownership to our target clients. Our services will help to level the competitive playing field by making online banking services available to more banks in China. Yucheng will benefit from the associated recurring hosting fees and shared revenue from transactions from providing the ASP services. This is a win-win for Yucheng and the banking industry. The ASP platform is expected to be live in one to two months with its first banking customer."

Mr. Hong further remarked, "CFCA is China's national authority for e- commerce certificate authentication, and has been the driving force behind the adoption of e-banking since its inception. Our partnership with CFCA is a strong endorsement of our leadership position in e- banking solutions and our deep understanding of the banks' requirements. Given its status within the banking community, CFCA will be very influential in speeding up the adoption of e-banking platforms by small- and mid-sized banks in China."