Empirical Study On The Impact Of Internet Finance On The Profit Of China's Commercial Banks

With the rapid development and popularization of network information technology,the scale of Internet users in China is constantly expanding,from 298 million in 2008 to 731 million in 2016,of which mobile Internet users increased from 118 million to 695 million people.There is no exaggeration that the Internet has penetrated into all aspects of people's life,making people's lifestyles and consumption patterns increasingly networked,and has imperceptibly influenced the development direction of the world economy,politics,and culture and promoted profound changes in all walks of life.The huge market capacity and the Internet platform of opening,equality,cooperation and sharing provide a very favorable soil for the emergence and development of Internet finance.During the rapid development of Internet finance,China's economy began to enter the "new normal" stage,and the rapid growth turned into medium-high growth.As a result of the changes in the macroeconomic environment and the moderate economic growth,the profits of China's Banking industry also began to decline,and Banks have been shedding workers and cutting wages.At this time,Internet finance began to rise rapidly,and various kinds of innovative products emerged,gradually extending the business scope to the payment,financing,wealth management and other fields of commercial Banks.As of December 2017,the number of Internet users who bought Internet financial products in China has reached 129 million,up 30.2 percent year on year.The scale of Internet financing increased from 215.297 billion yuan in 2013 to 3.15 trillion yuan in 2017,and it is expected to reach 5.36 trillion yuan in 2018.Based on the current situation of commercial Banks,this paper explores its impact on the profits of commercial Banks from the perspective of Internet finance,so as to provide a more diversified perspective for commercial Banks to develop better under the new normal economy.This paper firstly defines the concept of Internet finance,and explains the Internet finance and the financial Internet.Although Internet finance appears late in China,there are various forms of its development,such as financial Internet,Internet payment,P2 P network lending,non-P2 P small loan and crowdfunding.China's commercial Banks have a single source of profit,mainly relying on net income of interest and commission,and investment income.Followed by an mechanism analysis of the Internet financial impact on the commercial Banks in the aspect of deposit business,loan business,fee and commission income,the result of the universality of Internet finance has indeed impacted the profits of commercial Banks.Thirdly,the relationship between Internet finance and commercial Banks in reality is analyzed.In fact,the development of Internet finance has both advantages and disadvantages to commercial Banks.On the one hand,Internet finance has forced commercial Banks to reform,whether it is management mode or background operation,which makes the capital conversion of commercial Banks more efficient.On the other hand,Internet finance absorbs a large amount of deposits,uses flexible lending rates and innovates diversified wealth management products,so that the traditional business of commercial Banks is hampered.Finally,empirical research is conducted on the relationship between Internet finance and commercial Banks,and the data is used to demonstrate that Internet finance has brought about a positive impact or negative impact on the profitability of commercial Banks.This paper regards the 13 Banks of Bank of China,Agricultural Bank of China,Industrial and Commercial Bank of China,China Construction Bank,Bank of Communications,China Minsheng Bank,Industrial Bank,China Guangfa Bank,Shanghai Pudong Development Bank,China Everbright Bank,China Merchants Bank and Bank of Beijing as the research object,the regression analysis of panel data is processed by stochastic effect variable intercept model to explore the effect of third-party payment scale,P2 P net loan size,crowdfunding financing scale,GDP growth rate,non-performing loan ratio on total return on assets.The empirical results show that the third-party payment scale,P2 P net loan size and GDP growth rate have a positive correlation with the profits of commercial Banks,which promote the profits of commercial Banks,and the influence of the third-party payment scale is very significant.The size of crowdfunding financing and the non-performing loan ratio are negatively correlated with the profits of commercial Banks,which have negative impact on the profits of commercial Banks.Especially,the effect of crowdfunding financing scale is very significant.At the end of the paper,coping strategies are put forward.While commercial Banks are seeking their own transformation,the government should also supervise Internet finance strictly,so as to realize the joint development and prosperity of Internet finance and commercial Banks in China,and achieve the mutually beneficial and win-win situation ultimately.