Research On The Impact Of Fintech On The Profitability Of Commercial Banks

With the progress and maturity of digital technology,the combination of financial industry and technology has become more and more close,and fintech has gradually become an important part of the future development plan of financial institutions.As an important part of financial institutions,the rapid development of financial tech has brought multiple influences to commercial banks.On the one hand,fintech provides power for commercial banks,technology optimization can change the traditional business mode of commercial banks,improve operation efficiency and simplify business process;on the other hand,the development of fintech breaks the original status of commercial banks,the products of fintech companies compete with banking business,squeeze the market share of commercial banks,and brings new risks to commercial banks,which aggravates the uncertainty of the future of banks.In this context,it is of great significance to explore the deep influence of fintech on commercial banks to improve their profitability and accelerate the reform of fintech.First,based on the existing research conclusions of fintech influencing commercial banks,based on the financial innovation theory,the long-tail effect theory and the catfish effect theory.Explain the reasons why fintech affects the profitability of commercial banks,and put forward the research hypothesis of this paper.Next,summarize the development status of fintech in China,and using baidu’s search engine database,building the development index of fintech in China through the "text mining method".Then sample annual data from 30 banks for 2011-2021,an empirical study by bank type and size group,tests the impact of fintech on the profitability of different commercial banks,and select indicators from the bank cost side and the business side,exploring the transmission path of the influence of fintech on its profitability.Last,combined with the empirical findings of this paper,with the theoretical analysis,advising on banks’ fintech development.The main conclusions of this paper are as follows: First,the development of fintech has a "U"-shaped effect on the profitability of commercial banks.At the beginning of the financial development of science and technology,financial technology companies will produce competition effect,new financial technology products will squeeze bank traditional business,bank assets and liabilities and intermediate business are impacted,commercial banks are not timely,and for financial technology input is greater than its output,lead to the profits of commercial banks.In the later stage of the development of fintech,commercial banks can increase their investment and fully absorb the technical advantages,which can effectively improve the operating efficiency of banks,reduce labor costs and operating costs,so as to significantly improve the profitability of banks.Second,according to the type and size of commercial banks into different samples,empirical analysis,the results show that small commercial banks are more than large commercial banks,and different types of commercial banks are different,among them,the city of the financial technology than state-owned banks and joint-stock banks,this is mainly because of the bank size and structure,its ability to resist risk and development strategy also has differences.Thirdly,through the construction of multiple intermediary effect model,this paper tests the results that fintech can influence the profitability of commercial banks through the cost end and business end of banks,and the total cost and net profit margin of commercial banks are the key transmission path for fintech to influence the profitability of commercial banks.