Research On The Impact Of Fin Tech On The Profitability Of Commercial Banks

In today’s era,fintech is booming,financial innovation is emerging one after another,and all kinds of new financial things are reshaping the banking industry.Under the background of accelerated financial disintermediation and steady progress of interest rate marketization,the traditional profit model of deposit-loan difference of commercial banks is unsustainable.It is necessary to find new development momentum and open up new profit growth points.It is the consensus of the industry to apply fintech and develop intermediary business to improve the profitability and sustainable development of commercial banks.Therefore,it is a topic worthy of study whether the application of fintech can improve the profitability of China’s commercial banks at this stage and whether the intermediary business can be used as an intermediary channel for the impact of fintech on the profitability of commercial banks.The relationship between fintech,intermediary business and the profitability of commercial banks is complex,and the influencing factors of the profitability of commercial banks are diverse.The paper classifies and combs the literature on fintech and bank profitability,fintech and bank intermediary business,intermediary business and bank profitability and other influencing factors of bank profitability,comprehensively reviews the relevant literature,and then puts forward the research theme,namely studying the impact of fintech on commercial bank profitability from the perspective of intermediary business.Fintech is a technology driven financial innovation,and intermediary business is an important business type to form non-interest income of banks.Both of them have rich connotation and extension and broad development prospects.Under the background that the profitability of the banking industry shows a downward trend and the banking revenue structure needs to be optimized,it is of great significance to develop intermediary business and implement the "light bank" strategy.Commercial banks promote digital transformation and upgrading through the layout of fintech.The application of fintech has an important impact on the operation and management and intermediary business of commercial banks,and then plays a role in the profitability of commercial banks.The theoretical mechanism of fintech affecting the profitability of commercial banks is complex.From the perspective of overall effect,the direction and size of the effect of fintech is the result of the game between its technology spillover effect and market substitution effect.The former is reflected in financial intermediary theory,catfish effect and connection effect,while the latter is reflected in financial disintermediation theory,platform economy theory and long tail effect.From the intermediary effect of intermediary business,fintech affects the bank’s intermediary business through financial innovation and financial function,while the intermediary business affects the bank’s profitability through scope economy and the changes of cost-benefit.Therefore,fintech plays an intermediary role in the bank’s profitability through intermediary business channels.According to the relevant theoretical analysis,combined with the development status of commercial banks,this paper puts forward relevant research hypotheses.In order to verify the scientificity and applicability of the research hypothesis,this paper collects and sorts out the unbalanced panel data of 67 commercial banks from 2011 to 2020,constructs China’s macro fintech index by using the method of "text mining + factor analysis",and makes an empirical study by using System GMM model,intermediary effect model and regulation effect model.The research conclusions of this paper are as follows: First,fintech plays a positive role in the profitability of commercial banks on the whole,and the technology spillover effect of fintech on the profitability of banks exceeds the market substitution effect.Second,intermediary business plays a negative intermediary role in the process of fintech improving the profitability of banks.Intermediary business plays a positive role in the profitability of banks through economies of scope,cost reduction and efficiency increase,but the market diversion and substitution brought by fintech plays a negative role in the development of intermediary business.Therefore,the intermediary effect of intermediary business partially offsets the spillover effect of fintech on the profitability of banks.Third,the overall effect of fintech on bank profitability and the intermediary effect of intermediary business are heterogeneous.The role of fintech in improving the profitability of listed banks and local banks is higher than the overall level of commercial banks.At the same time,the negative intermediary effect of its intermediary business is relatively more obvious.Fourth,bank revenue structure,asset capital and other factors a positive regulatory effect on the impact of financial technology on bank profitability.The development of intermediary business,the enhancement of income diversification,the expansion of asset scale and the improvement of capital adequacy ratio create favorable conditions for fintech to improve the profitability of banks.The possible innovations of this paper are as follows: first,it brings fintech,intermediary business and commercial bank profitability into the same research framework,empirically study the intermediary effect of intermediary business on fintech’s impact on commercial bank profitability,and explore the new direction and path of research in the field of commercial bank profitability.Second,the construction of fintech index based on the connotation,extension and information of fintech can reasonably reflect the development of macro fintech in China.Third,it deeply discusses the factors and mechanisms of the impact of fintech on the profitability of commercial banks,further analyzes the heterogeneity of the above overall effect and intermediary effect according to the listing situation and business region of commercial banks,and discusses the regulatory effect of revenue structure,asset capital and other factors in the process of fintech affecting the profitability of commercial banks.Based on the analysis results of empirical research and the development of commercial banks,the policy suggestions of this paper are as follows:First,in the application of fintech,the state should vigorously carry out the construction of fintech infrastructure to lay a solid foundation for the application of fintech.The government should formulate policies to promote the application of fintech,and develop regulatory technology to improve supervision.The market should maintain the prosperity of fintech industry and promote the coordinated development of banking fintech and corporate fintech.Second,in the development of intermediary business,the state should introduce relevant policies to encourage commercial banks to develop intermediary business.Commercial banks should attach great importance to the status of intermediary business and implement the development strategy of "light bank",and strengthen the investment and application of fintech in the field of intermediary business and improve the market competitiveness of intermediary business.Third,in the transformation of commercial banks,we need to accelerate the construction of digital banks and promote the deep integration of fintech and bank management.We should promote the diversified operation of banks,enhance the strength of asset capital to create good conditions for the empowerment of fintech.Meanwhile,we should implement the differentiated transformation route according to the specific situation of commercial banks.