Impact Of The Internet Finance On The Development Of Fintech In Banking Industry

The rapid development of Fin Tech has profoundly changed the business models and innovative concepts of the traditional financial industry.The supply entities of Fin Tech include both Internet finance companies that have rapidly developed with advantages such as customer insight and technological response,as well as commercial banks that are actively transforming.Specifically,while the rise of Internet finance companies have a direct negative impact on commercial banks,they also promote the development of commercial banks’ Fin Tech under the mechanism of competitive pressure or technology spillover.Existing researches have examined the impact of Internet finance on many aspects of commercial banks such as business performance,loan allocation and risktaking,but few have explored its role in influencing the development of commercial banks’ Fin Tech.Based on the elaboration of the research background and literature review,this thesis firstly reviews the development process of Internet finance in China in the light of the changes in the regulatory environment and uses data from PEdata to depict the characteristics of Internet finance companies.Secondly,using a sample of 430 commercial banks from 2011 to 2019,the impact of Internet finance on commercial banks’ Fin Tech development is empirically examined using data on Internet finance companies in the banks’ regions and Fin Tech indexes at the individual bank level measured by relevant research,and the impact mechanism is tested.The empirical results show that the majority of Internet finance companies in China are start-ups,with nearly half of them having a venture capital background,and that the regional distribution is characterized by "more in the east and less in the west".Overall,Internet finance can significantly improve the Fin Tech level of commercial banks.Further mechanism testing results indicate that in regions with a large number of Internet finance companies engaged in financial business,this enhancement effect is more pronounced,supporting the mechanism of competitive pressure.In regions with a high proportion of Internet finance companies with venture capital background,or in commercial banks that have cooperated with technology companies,this enhancement effect is also more evident,supporting the technology spillover mechanism.The heterogeneity analysis shows that the enhancement effect of Internet finance on commercial banks’ Fin Tech is more pronounced for banks with large scale,good management capability and many physical branches,as well as in an environment of slow economic growth.The findings of this thesis provide empirical evidence for scientifically evaluating the impact of Internet finance on the development of commercial banks’ Fin Tech,thereby deepening people’s understanding of the market structure of Fin Tech.