Fintech and Banking Efficiency: Evidence from Chinese Commercial Banks

Abstract

Will the development of FinTech improve the efficiency of commercial banks in China? In recent years, FinTech has been continuously developing and applying to the financial industry which has brought opportunities and challenges to the operation and management of commercial banks in China. We focus on the empirical analysis of the impact of FinTech on the operating efficiency of commercial banks. By examining Chinese commercial banks as an empirical sample, we find that the development of FinTech has a significant role in promoting the efficiency of Chinese commercial banks. On this basis, we further compared the feedback of changes in the efficiency of different Chinese commercial banks to the development of FinTech. Accordingly, the efficiency changes of city commercial banks in China have been most significantly affected by the development of FinTech. Based on the empirical results, the financial development elements are further added to explore the geographical characteristics of city commercial banks. We find that the development of FinTech has a stronger effect on the efficiency change of city commercial banks in areas with higher levels of financial development.

Keywords: FinTech; Chinese commercial banks; Financial development

JEL Classification: F65,G21,G39