Study On The Impact Of Financial Technology On The Performance Of Commercial Banks

The continuous integration and development of financial technology and financial services has brought far-reaching impact on the operation and management of commercial banks.On the one hand,financial technology has provided technical support for the transformation and upgrading of commercial banks,optimised their traditional operating models,reduced their operating costs,accelerated the innovation of financial products and financial services,and improved the efficiency of resource allocation and risk management capabilities.On the other hand,the new financial industry developed by using digital technology has impacted on the traditional business operations of commercial banks,encroaching on their market share and causing a certain negative impact on their performance.Therefore,it is important to study the impact of financial technology on the performance of commercial banks,in order to achieve digital and intelligent development and promote commercial banks to improve their performance level.This paper first clarifies the concept of fintech and its development history,and explains the theoretical basis of fintech’s impact on commercial bank performance,taking the long tail theory,financial intermediation theory,platform economy theory,catfish effect theory and information asymmetry theory as entry points.Then,on the basis of the theoretical analysis,the technological spillover effect and competitive effect of the development of fintech on the performance of commercial banks are analysed from the perspective of the competing relationship between fintech and commercial bank performance.The technology spillover effect is mainly reflected in the application of fintech technology by commercial banks themselves,while the competition effect is mainly reflected in the external competition brought by fintech start-ups with the help of fintech.The impact of fintech on commercial banks’ performance is then analysed from the perspective of credit risk,and the differences in the impact of fintech are analysed for different types of commercial banks.This paper takes 105 commercial banks from 2011 to 2020 as the research sample,uses the provincial-level digital financial inclusion index compiled by the Digital Finance Research Centre of Peking University as the explanatory variable,synthesizes each commercial bank’s performance score through factor analysis as the explanatory variable,and uses a two-way fixed effects model and a mediating effects test model to investigate the relationship between fintech and commercial bank performance and the impact mechanism Empirical tests were conducted.The results show that:(1)the technology spillover effect of fintech on commercial banks is greater than the competition effect,and fintech has a catalytic effect on the overall performance of commercial banks in China;(2)fintech can improve the performance of commercial banks by reducing their credit risk level;(3)there is heterogeneity in the impact of fintech on the performance of different types of commercial banks in China,with the most significant impact on the performance of urban commercial banks and the most significant impact on the performance of rural commercial banks.(3)There is heterogeneity in the impact of fintech on the performance of different types of commercial banks in China,with the most significant boost to the performance of urban commercial banks,the second most significant boost to rural commercial banks,and a relatively smaller boost to national commercial banks such as state-owned banks and joint-stock banks.The reason for this may be that national commercial banks have obvious advantages in terms of financing channels and financing costs,resulting in a lack of incentive to reform and innovate.City and agricultural commercial banks,on the other hand,are geographically restricted in opening branches and have obvious disadvantages in terms of profit sources and expanding the scope of their business operations,so they are more eager to reverse the unfavourable situation of offline customer acquisition channels through fintech.Moreover,their main customer base is highly consistent with the target audience of fintech,so they have an advantage in grasping the needs of their customer base.By applying fintech to its traditional business operations,it can cultivate its own competitive advantages,broaden its marketing channels and improve its service quality,and combine its geographical advantages to achieve a bend in the road.Combining the above research results,the following countermeasures are proposed to improve the performance of commercial banks in the context of financial technology development:(1)actively build a financial technology development strategy,increase the cooperation between commercial banks and innovative financial technology enterprises,share the achievements of financial technology,and create intelligent and technological commercial banks;(2)actively improve the financial technology risk control system of commercial banks.Embedding commercial banks’ risk management in various scientific and technological means,providing commercial banks with accurate customer portraits,improving banks’ antifraud capabilities,and strengthening commercial banks’ credit risk monitoring and early warning management;(3)Different types of commercial banks should implement differentiated financial technology strategies in line with their own characteristics.