Research On The Impact Of Financial Technology On The Profitability Of China’s Commercial Banks

With the rapid growth of China’s economy and the update and iteration of Internet technology,cutting-edge technologies such as Artificial intelligence,Big data and Blockchain continue to mature,and the combination of finance and technology has become a trend for future development.The technological changes brought by the rapid development of financial technology continue to penetrate into our daily life,and while influencing and changing our lifestyle,they also bring new development opportunities and unprecedented challenges to the traditional banking industry.Commercial banks play a major role in China’s financial industry and play a very important role in serving the real economy.In the context of the rapid development of financial technology,it is important to study the improvement of profitability and sustainable and sound development of commercial banks in China to promote the development of China’s economy.Based on the theoretical foundations related to Financial intermediation theory,Long tail theory,Financial disintermediation theory,and the analysis of the mechanism of financial technology affecting the profitability of commercial banks in China,it is found that financial technology can reduce the operating costs,improve revenue growth and customer satisfaction of commercial banks in China,but it also increases the pressure on the service efficiency,fixed cost control and risk control of commercial banks.Based on the annual operating panel data of commercial banks in China from 2016 to 2021,the five major market scale indicators,including the scale of Internet payment,Mobile payment,Big data,Cloud computing,and Artificial intelligence,are integrated and constructed into a Fintech index using the Entropy method to empirically analyze and verify the impact of Fintech on the profitability of commercial banks in China.The analysis finds that Fintech has a negative impact on the profitability of commercial banks in China,and the negative impact of the development of financial technology on Joint-stock banks and Urban commercial banks is more obvious compared to Large state-owned commercial banks.Based on the results of the empirical analysis,it is recommended that commercial banks increase their investment in and use of financial technology,strengthen innovation,increase the proportion of non-interest income,increase resource sharing among banks,improve risk management mechanisms,and focus on recruiting and training talents to improve their profitability.