The Impact Of Digital Transformation On The Profitability Of Commercial Banks

With the rapid development of digital economy,Chinese commercial banks are accelerating digital transformation.In order to analyze the impact of digital transformation on the profitability of commercial banks,this paper uses unbalanced panel data of 197 commercial banks in China from 2010 to 2018 as the research sample,and uses individual fixed effect model for empirical analysis.The results show that:first,in the short term,the high cost pressure will bring significant negative impact on the profitability of commercial banks,while in the long term,digital transformation can bring positive impact on the profitability of commercial banks.Secondly,different dimensions of digital transformation have different impacts on the profitability of commercial banks.Product transformation has the largest impact on the profitability of commercial banks,followed by organizational transformation and cognitive transformation.Third,the impact of digital transformation on the profitability of different types of commercial banks is heterogeneous.In the short term,the profitability of city commercial banks and joint-stock commercial banks is most negatively affected by the digital transformation.In the long term,digital transformation has the fastest and most lasting positive impact on the profitability of rural commercial banks.The positive effect of digital transformation on state-owned commercial banks and city commercial banks is slow and not obvious.The positive effect of digital transformation on joint-stock banks is fast but not sustainable.Digital transformation has the fastest positive impact on the naturally digital private banks,and it has a trend of continuous positive impact.Therefore,commercial banks with different asset sizes and types should make clear their own business models and target positioning when implementing digital transformation,and plan the resource input in the dimensions of cognitive transformation,organizational transformation and product transformation,so as to achieve the goals of digital transformation better.