Research On The Impact Of Fintech On Intermediate Business Of Commercial Banks

The tendency of "de-realization" has grown more apparent in recent years,and the growth fintech has given rise to a range of efficient financial technology tools,including as big data,blockchain,cloud computing,and so on.These new technologies are having a small but significant influence on China’s conventional financial system.Commercial banks are experiencing unprecedented problems as a result of the fast growth of fintech,ranging from the most traditional deposit and lending industry to intermediate business.Emerging financial sectors such as third-party payment and E-wealth management are fiercely competing,bringing substitution impact as well as spillover effect to commercial banks,particularly in the sphere of intermediate business.As a result,commercial banks are undergoing a crucial change,and intermediary business has emerged as a significant link in this transformation,which must be fully leveraged in order to achieve a better level of business performance.Therefore,studying the interaction between fintech and intermediate business is both practically and theoretically important.This study investigates the interaction between fintech and intermediary business in this scenario.First,I analyzed and summarized the current state of domestic and foreign research on fintech,research on intermediary business,and research on the relationship between these two by collecting analyzing a large amount of domestic and foreign literature.Second,the impact of the development of fintech on intermediary business is analyzed from a theoretical standpoint,which is discussed from two perspectives of substitution effect and technology overflow effect,and the impact path of fintech on commercial banks is analyzed as well as the difference of its path impact is analyzed,and three hypotheses of this paper are proposed based on the above analysis.The explanatory variables of this paper are selected as the data source of the Fintech Development Index,which can comprehensively reflect the development of Fintech,as the explanatory variables,the percentage of intermediate business income released by major listed banks as the mediating variables,and the control variables are selected from micro,meso,and macro perspectives.To quantitatively analyze the impact,a panel data model of the influence of fintech on commercial banks’ intermediary business is built,and regression analyses are run on the bank sample’s overall and sub-sample data to investigate the impact.Then,using net interest margin as the mediating variable,a mediating effect model is built to empirically examine whether fintech affects commercial banks’ intermediate business by affecting net interest margin,and whether there is heterogeneity in this effect across different types of bank samples.Eventually,the empirical analysis results are presented,and policy suggestions for various types of commercial banks are made based on this study.The empirical results show that the development of fintech has a significant negative impact on commercial banks’ share of intermediate business income and hinders the development of intermediate business in a heterogeneous way,which is the larger the bank,the smaller the impact.In terms of the effect route,banks begin to seek new profit streams in intermediate business to offset the negative impact of diminishing net interest margins owing to financial technology development.According to empirical analysis,the indirect effect generated by net interest margin as an intermediate variable in this process is not a mediating effect but a masking effect,and it primarily responds to urban banks,and the negative impact of fintech on intermediate business will be greater if the variable of net interest margin is controlled.As a result,commercial banks,particularly urban commercial banks,should continue to investigate new business models and concentrate on the organic combination of their strengths and financial technology.