Impact Of Internet Finance On Traditional Banking Industry

As a new industry which combines internet and finance, internet finance innovatively applied internet technology to financial industry. Based on summarizing the main modes of Internet finance and its operational processes, this paper focuses on the differences between traditional banking and Internet finance, analyzes Internet finance’s value and impact on the traditional banking, and then gets the following conclusions.Its main modes include the third party payment, person to person financing, crowd funding and big data finance. It features the application of big data, the efficient financial service and the extension to long tail market.Payment is the infrastructure of finance. The efficient third party payment provides credit indemnification for internet transactions which across time and space and helps companies to lower their cost of transactions and fund management. It improves finance functions by providing multi-scenes payment satisfying people’s demands.The essence of P2P funding, crowd funding and big data finance is a direct capital trading action between debtor and creditor without any agency. The development of these three modes can help to scale up direct financing, optimize financial structure, relieve the long existed financing pressure for small and medium-sized enterprise, lower the threshold of finance and promote inclusive finance.The development of internet finance has a big impact on the revenue of traditional banks and also changed their business modes and service philosophy. In order to remain invincible under the background of internet finance, the traditional banking industry should take the initiative to cooperate with internet finance companies, simplify its business process, develop new financial products, improve users’experience, adopt big data strategy and get involved in the long tail market.Internet finance and traditional banking industry both have their own advantages and will combine in the future. At the same time, networked finance is inevitable since internet has become a social infrastructure. In order to promote the sound development of internet finance, to prevent risk and protect financial consumers’right, the relevant enterprises should strengthen self-discipline, the government should speed up legislation and the regulators should develop supervision mode to create a favorable financial environment.