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

Fintech has been developing rapidly in recent years and has become a major driving force in upgrading China’s financial industry.Fintech has a significant impact on the business development of China’s listed commercial banks,and it has become a consensus for reform within China’s banking industry to become a trendsetter in the development of Fintech in the new era.Fintech brings new development opportunities to our society and economy,but in a sense it can also cause some obstacles to the development of our traditional commercial banks.In order to investigate the impact of Fin Tech on the profitability of traditional commercial banks in depth in conjunction with the latest development applications of Fin Tech,this paper conducts a study from both theoretical and empirical analysis.Theoretically,this paper starts from fintech,composes the related concepts and core application technologies of fintech,and then discusses the economic theories of fintech affecting commercial banks’ profitability;then elaborates the development history and current situation of fintech,the current situation of commercial banks’ profitability,and focuses on the impact of fintech on commercial profitability from two aspects:competition effect and technology spillover effect.In the empirical analysis session,we discuss the differences in the impact of Fin Tech on commercial profitability based on data.In the empirical analysis,36 listed commercial banks are selected as the sample based on data availability,and the time span is selected from 2011 to 2021,a balanced panel data model is constructed,the fintech index is constructed as the core explanatory variable based on the number of results of Baidu news search for fintech keywords,the ROA of total assets is the explanatory variable,and the control variables are selected at the bank level and macro level respectively.The fixed effects are used to empirically determine the overall impact of fintech on commercial banks’ earnings and the heterogeneous impact on banks of different sizes.The study concludes the following two points: first,the current development of fintech has more competitive effects than technology spillover effects,and more negative effects than positive effects on commercial banks’ profitability in general.Second,the impact of fintech on commercial banks’ profitability varies among commercial banks of different sizes.Compared with medium and large commercial banks,small banks are relatively more impacted by the development of fintech.Combining the theoretical analysis of this paper with the empirical results,feasible suggestions are put forward for how commercial banks should develop in the context of fintech,such as customizing differentiated development strategies,expanding small and micro financing channels with the help of technology,paying attention to intermediate business,and focusing on the introduction and training of technology talents.