The Impact Of Financial Technology On The Capital Adequacy Ratio Of Commercial Banks In My Country

In recent years,the ever-changing scientific and technological progress has promoted the rapid development of financial technology,which has also brought new opportunities and challenges to the banking industry.On the one hand,the banking industry has realized the innovation and upgrading of products and services with the development of financial technology,and improved its own operating efficiency.On the other hand,with the development of financial technology,many Internet companies have begun to get involved in financial business,making commercial banks face a more complex and fierce competitive environment.The report of the 20 th National Congress of the Communist Party of China puts forward that it is necessary to strengthen and improve modern financial supervision,strengthen the financial stability guarantee system,incorporate all kinds of financial activities into supervision according to law,and keep the bottom line of no systemic risk.Banks are one of the most important parts of the financial system.Capital adequacy ratio is an important indicator to measure whether they can operate and develop normally.Under the current background,it is of great theoretical value and practical significance to study the impact of the development of financial technology on bank capital adequacy ratio.This paper uses the panel data of 122 commercial banks and their corresponding cities in China from 2011 to 2020,and uses fixed effects to empirically test the impact of the development of fintech on the capital adequacy ratio of local banks.At the same time,the reliability of the results is supported by the introduction of instrumental variables and the construction of new indexes by principal component analysis.The research shows that:(1)The development of financial technology helps to improve the capital adequacy ratio of local banks,and the results are still valid after the robustness test.(2)In terms of heterogeneity analysis,there are differences in the nature of banks in the development of financial technology for the improvement of capital adequacy ratio of commercial banks.Compared with systemically important banks,the development of financial technology has a more significant effect on the improvement of capital adequacy ratio of local non-systemically important banks.In addition,from the geographical division,the role of financial technology in improving the capital adequacy ratio of commercial banks is also different.Specifically,compared with the central and western regions,the development of financial technology in the eastern region has a more significant effect on the improvement of bank capital adequacy ratio.Compared with the first-tier cities,the development of financial technology in the second and third-tier cities has a more significant effect on the improvement of bank capital adequacy ratio.(3)The mechanism test shows that the development of financial technology may improve the capital adequacy ratio of commercial banks by reducing the non-performing loan ratio of commercial banks.At the same time,the development of financial technology will enhance the competitiveness of commercial banks,but it may thus enhance the intensity of competition among banks and weaken the capital adequacy ratio of commercial banks.Based on the above conclusions,this paper puts forward some suggestions on how to use financial technology more efficiently for all kinds of banks,so that China ’s commercial banks can transform and upgrade smoothly and orderly under the environment of rapid development of financial technology.