Empirical Research On The Impact Of Internet Financial To Commercial Bank Profitability

In recent years, the internet continues to heat up. China has entered the "Internet plus" era. Internet finance combine traditional banking with spirit of internet, which attract public focus. Internet finance with its low cost, high transparency and convenient operation is welcomed by customers, which has brought impact to traditional banking. Internet finance help traditional banking to promote transformation and update their products and services in order to consolidate marker position. The emergence of internet finance is both an opportunity and challenge for our commercial bank. To explore the impact of internet finance on the profitability of commercial in China has far-reaching significance.In this paper we use the combination of theory and empirical method. We select BOC, CCB, ICBC, BCM, CIB, GDB, CMB, SPD, CEB, CMBC, China CITIC Bank, Bank of Nanjing, and Bank of Beijing as research object. We measure the commercial banks profitability composite score from 2009 to 2014 by using factor analysis. Then set up the random effects of cross section model, and explore the internet financial mode (the third party payment, P2P, the crowd funding) impact on the profitability of commercial banks. The empirical result shows that the third-party payment and the crowd funding have positive impact on the profitability of commercial banks, but the effect of the crowd funding is not significant. P2P has negative impact on the profitability of commercial banks, and the effect is remarkable. To deal with the internet financial shocks, the state-owned banks and the city banks’ability is better than the stock banks. In addition we also anglicize how internet finance affects the profitability of commercial banks by influencing the assets, liabilities and profits. At the end of this paper, we put forward the strategy of improving the commercial banks profitability. As for banks, they should do more internet-based business and make grate efforts to enter small and micro business customers market. As for the governments, they should increase supervisor of internet finance. Only in this way, can we achieve win-win situation between internet finance and commercial banks.