The Impact Of Internet Finance On The Profitability Of Commercial Banks

With the increasing popularity of the Internet,the Internet Finance in China has also developed rapidly.Internet finance can be defined as Internet Finance in a narrow sense and Internet Finance in a broad sense:Internet Finance in a narrow sense only refers to the financial business based on Internet technology carried out by Internet enterprises of non-financial institutions;while Internet Finance in a broad sense includes both Internet Finance in a narrow sense and Internet financial business carried out by traditional financial institutions.This paper focuses on Internet Finance in a narrow sense.After years of development,China's commercial banks have gradually formed a perfect banking system.As a traditional financial institution,they have played an important role in financing.With its unique advantages,Internet financial enterprises form an impact on commercial banks from three aspects of asset business,liability business and intermediary business,seizing the original customers and resources of commercial banks,resulting in changes in their profitability.And commercial banks are not waiting to die,but actively participate in the practice of Internet finance,and carry out Internet payment,Internet Fund,network financing,e-commerce platform and direct banking.This paper studies the impact of Internet Finance on the profitability of commercial banks with the increasing popularity of the Internet.According to the type of Internet finance,this paper selects 11 data indexes from four aspects of Internet payment,Internet financing,Internet insurance and Internet lending to calculate the Internet financial index.With this as the core explanatory variable,the threshold panel regression model is constructed to explore the different effects of different levels of Internet Finance on the profitability of commercial banks with the change of Internet penetration.The paper is divided into five chapters,including introduction,overview of Internet Finance and commercial banks,theoretical basis of Internet Finance affecting commercial banks profitability,empirical analysis of the impact of Internet Finance on commercial banks' profitability,conclusions and suggestions.The results show that,with the threshold Internet penetration rate of 34.3%,the impact of Internet financial level on the ability of commercial banks is different.When the Internet penetration rate is lower than the threshold,Internet financial enterprises are still in the initial stage,and need to cooperate with banks to develop business,so Internet Finance and the profitability of commercial banks have a positive correlation;while when the Internet penetration rate is higher than the threshold,Internet financial enterprises develop and expand,and impact on the traditional frnancial model of commercial banks,both of which are negative The relationship of direction.The innovation of this paper lies in the use of factor analysis,from the Internet payment,Internet insurance,Internet financing,Internet lending four levels of indicators,comprehensive measurement of the level of Internet finance indicators This paper constructs a threshold panel regression model to analyze the different effects of different internet financial development levels on the profitability of commercial banks with the increase of Internet penetration.Based on the data availability and integrity,only 52 listed commercial banks' annual data are selected as the research sample,and the sample size is relatively small;the variables selected in this paper can only reflect the relationship between the Internet financial scale and the profitability of commercial banks to a certain extent,and some variables that may have a small impact on the research conclusion cannot be selected All of these factors will affect the empirical results to a certain extent.