Research On The Impact Of Diversification Of Profit Mode On The Operational Risk Of China’s Commercial Banks

With the interest rate marketization reform coming to an end,the golden age of China’s commercial banks to rely on the spread of income is coming to an end.The banking industry will have to face the market environment full of competition and uncertainty.On the one hand,the economy shifts gears and the ’growth is weak.On the other hand,cross industry competition has intensified and cross-border competition has sprung up.As the core of China’s financial system,commercial banks are facing unprecedented challenges.How should China’s banking industry be in the process of reform?One experience from the international banking industry is to diversify the profit model and broaden the income channel.Many commercial banks in China actively carry out the practice of non interest business,and strive to ease the decline of net profit by increasing non interest business.However,the symbiosis of risk and income is the law of finance,and safety and profitability are the principles of banking operation.Commercial banks can not ignore the risks that they follow while pursuing profits from diversification.In view of the important position of China’s banking industry,it is of great significance to clarify the relationship between diversification of profit patterns and operational risks.First,it helps to stabilize the banking industry and achieve sustainable development.The two is to maintain financial security and prevent and control the risk of the system.Based on the above background,this paper makes a qualitative and quantitative analysis,and makes a qualitative analysis on the development and present situation of the change in the profit model of China’s commercial banks,and points out the trend of the development of interest and non interest business.Secondly,through the construction and calculation of the diversification index DIV and the Z value of the bankruptcy risk index,we find that the diversification of the profit model of commercial banks in China has been increasing continuously,and the business risk has also gradually expanded with the deterioration of the commercial environment.Finally,using the panel data model to return,from the overall and part of the angle of 2007 to 2016,the diversification of the 20 main listed commercial banks in China has played a role in the decentralized management risk.It is found that the diversification of the profit model does not produce the risk dispersion effect.From the specific business,the fee and commission income have no significant impact on the risk.The investment income has a certain negative impact on the management stability of the sample bank.Through the above analysis,this paper puts forward some suggestions on the diversification of the profit model of commercial banks in China at the end of the article:commercial banks should treat diversified management rationally and take the development path suitable for their own characteristics.In the process of transformation,we should balance the relationship between income and risk.At the present stage,we can focus on the more stable revenue and commission income business,carry out the investment business carefully,and improve the level of risk management.In addition,the transformation of profit pattern should be supported by the transformation of human and organizational structure.Finally,catering to the tide of science and technology finance,the transformation ideas of commercial banks’ digital management are put forward.