Research On The Impact Of Fintech On The Profitability Of China’s Commercial Banks

Macroeconomic transformation and development as well as the development of commercial banks need to jointly promote commercial banks to fully apply fintech.The development of digital economy makes it urgent for banks to improve the original service channels and business development mode;As the profitability of banks declines,it is also urgent to consider the innovation of original businesses and the improvement of quality,efficiency and cost reduction of traditional businesses with the help of science and technology.At present,China’s economy is facing the triple pressures of demand contraction,supply shock and weakening expectations,combined with overseas geopolitical conflicts and the ravages of the epidemic,which have led to the fragmentation of the global industrial chain,leading to greater downward pressure on the economy.Whether the financial technology can help commercial banks to support the development of the real economy while ensuring their own profitability and development prospects has become a realistic problem in front of them.Fintech has enriched the way of banking business development,enriching mobile banking and online banking application functions at the front end,and creating a one-stop service platform.Build data center to strengthen data processing,application and analysis ability;The back-end builds a series of intelligent auxiliary systems such as intelligent risk control system,and the front end,middle stage and back end work together to empower the whole business process.On the one hand,the impact of fintech on the profitability of commercial banks is based on the impact of fintech on business development,including: the asset business side can fully analyze data and build digital trust through technology empowerment to promote inclusive financial business;The liability business side enhances customer stickiness by providing personalized services to customers,realizes the acquisition of current deposits of customers,and thus reduces the cost of debt.The intermediate business side based on the full analysis of customer data to meet the potential demand,and then realize the growth of the intermediate business income.On the other hand,fintech can also empower commercial banks by creating enterprise-level architectures supported by cloud computing and distributed technologies.Although the development of fintech has brought development opportunities to commercial banks and improved the efficiency and quality of business services,the homogenization degree among banks is relatively high,and the service characteristics are not obvious,which has not significantly improved their competitiveness.To sum up,the individual fixed effect model is used for empirical analysis of the annual data of 16 commercial banks from 2012 to 2020,and the following conclusions are drawn :(1)the application of fintech in commercial banks can improve the quality and efficiency of traditional businesses,reduce operating costs,and thus improve profitability.(2)There is heterogeneity in the impact of fintech application on profitability of banks of different sizes.Large banks have a negative correlation,while joint-stock banks have a significant positive correlation.(3)There is a mediating effect in the influence path,that is,the application of fintech firstly affects the electronic substitution rate of business and then promotes the profitability of commercial banks.Finally,based on the research conclusions,the following suggestions are put forward :(1)make clear the strategic planning according to the actual situation;(2)Seek value guidance and highlight business advantages;(3)Grasp data assets and improve data processing ability.