Research On The Impact Of Fintech On Risk-taking Of Small And Medium-sized Banks

In recent years,Fintech has made great progress in China,and the relevant indicators show that Digital Financial Inclusion Index of China,which measures the level of fintech application in China,has increased tenfold in the past decade.From the development of small and medium-sized banks in recent years,small and medium-sized commercial banks gradually carry out cooperation with financial technology.On the other hand,the problem of bank risk has been paid great attention in the background of the slow economic growth and the high attention to the systemic financial risk.So,how the application of financial technology will affect the risk-taking of banks is a hot issue in the field of practice and academia.This thesis uses panel data of 41 small and medium-sized banks from 2012 to 2020,and uses system GMM two-step method to analyze the impact mechanism of fintech on risk-taking of commercial banks.The results show that there is a negative correlation between fintech and the risk of small and medium-sized commercial banks,that is,the higher the level of application of fintech,the lower the risk-taking.Second,Capital adequacy ratio has played an intermediary role in the process by which fintech has influenced the risk taking of small and medium sized commercial banks.Specifically,fintech will reduce risk taking by making banks more efficient and Capital adequacy ratio.Further analysis shows that different asset allocation modes of banks have heterogeneity to the Capital adequacy ratio of banks,and the intermediary effect of fintech and Capital adequacy ratio to reduce bank risk is stronger and the bank risk is smaller in the banks with high proportion of off-balance sheet activities.Finally,the thesis finds the moderating effect of regional digital economy development on bank risk-taking.The development of regional digital economy has further enhanced the functions of financial technology,and the application of financial technology itself has a restraining effect on the risk-bearing of banks,the increase in the level of digitization in this region will enhance the restraining effect of financial technology on the risk-taking of banks.The reason behind this may be that the higher the region’s economy is digitized,its financial technology in the collection of soft information has a comparative advantage for banks to reduce credit risk can be more beneficial.Based on the research conclusions,this thesis puts forward the following targeted recommendations: First,small and medium-sized banks should further speed up the use of financial technology,optimize the business structure,broaden the service group and improve the service quality;Second,local governments should take various measures to accelerate the development of regional digital economy and improve digital infrastructure.