Fintech and Commercial Banking

Introduction

In the era of the third technological revolution, digital technology, such as big data and cloud computing, is developing rapidly. Originated from the merging of finance and technology, fintech emerged as the times required dynamic integration. The emergence and development of financial technology have a significant impact on financial institutions, especially commercial banks.

Fintech has accelerated financial disintermediation, causing a large number of customers to leave commercial banks and turn to fintech companies. The development of fintech big data, cloud computing, and other technologies has virtually weakened the credit functions of traditional commercial banks, such as the influence of third-party payment models. The convenient and diverse third-party payment business bypasses bank operations and reduces the credit functions of commercial banks. Traditional commercial banks are affected by their own management culture and lack of experience and are slow to respond to new things such as financial technology. The development ideas have not changed because traditional commercial banks lack professional fintech talents, and the development of fintech enterprises has occupied the market share of traditional banking. Since the competition among commercial banks has increased, profits have declined.

Fintech has broken the limitations of time and space, enabling commercial banks to have more customers in a larger area. Online services and intelligent robots brought by financial technology have replaced offline labor, and costs are reduced. Fintech can enhance the innovative awareness of commercial banks, attach importance to innovative talents, and constantly innovate to create more new products and new services. Commercial banks actively cooperate with financial technology companies, which can be more accurately identified through technologies such as big data customers and improve the risk pricing capability of commercial banks.

In the process of creating challenges or providing opportunities for traditional commercial banks, financial technology will inevitably have risks, which will have a negative impact on the reliable and stable development of commercial banks. Since fintech has not changed the function and essence of its financial intermediary, it still has traditional financial risks and makes traditional financial risks more hidden. Moreover, fintech risks also include moral hazards and technical risks based on Internet software and hardware. The academic research in this field mainly focuses on the performance of commercial banks and the operational efficiency of commercial banks, and most of the research mainly analyzes the financial activities carried out by fintech enterprises. Limited studies have focused on the fundamental risk of fintech on commercial banks. Therefore, this study focuses on the estimation of risks of commercial banks due to fintech to provide strategies to reduce the risks.