Research On The Impact Of Financial Technology On The Market Structure Of Banking Industry

The innovation and prosperity of Fin Tech have not only promoted the great progress in the application of information technology in the banking industry,but also generate a lot of business innovation,channel innovation and institutional innovation based on network technology,intelligent technology and big data technology.The "catfish effect" brought by Fin Tech has gradually changed the market structure of banking industry.For example,the "Quasi Bank" financial services carried out by emerging Fin Tech enterprises pose a competitive threat to traditional banking institutions,and traditional banking institutions begin to accelerate the transformation to new banking institutions.At the same time,the change of the market structure of China's banking industry has also produced a series of problems,which has brought new challenges to the development and supervision of the banking industry.Some studies believe that Fin Tech has had a disruptive impact on the banking industry,especially intensified the competition in the banking industry and even produced the trend of excessive competition.However,some studies believe that the technological progress of Fin Tech will accelerate market monopoly and produce the behavior of restricting competition in banking industry.Therefore,this paper focuses on the impact of Fin Tech on banking market structure,analyzes the impact of Fin Tech on banking market concentration,entry barriers and product differentiation,and puts forward policy recommendations on this basis.This is helpful to deepen the understanding of the banking change mechanism under the Fin Tech,which has important theoretical and practical significance for the development of Fin Tech,the transformation and development of banking industry,and the improvement of banking regulatory system.Based on the theory of banking market structure and information economics,this paper first constructs a three-dimensional concept category of Fin Tech,and further forms the threedimensional theoretical analysis framework of the impact of Fin Tech technology,function and institution on banking market structure,to explore the specific impact mechanism of different levels of Fin Tech on China's banking market structure.Secondly,according to the mechanism analysis,we get the corresponding model hypothesis,and use panel data and fixed effect regression model to test the theoretical hypothesis.Finally,according to the empirical analysis results,this paper discusses the problems of China's banking market structure under the influence of Fin Tech,and puts forward countermeasures and suggestions for the healthy development of Fin Tech and China's banking market structure,so as to provide the corresponding theoretical and practical reference for promoting the better integration of Fin Tech and banking industry and improving the banking industry regulatory policy.In the research on the impact of Fin Tech on the market concentration of China's banking industry,this paper analyzes and concludes that there are three main ways for Fin Tech to influence the concentration of banking industry: first,Fin Tech changes the cost structure of banks at the technical level to influence the market concentration;second,it changes the product model to influence the market concentration at the financial function level;third,it changes the market concentration at the institutional level through the entry of emerging Fin Tech enterprises.On this basis,we use provincial panel data for empirical analysis to draw the following main conclusions: first,there is a significant positive U-shaped relationship between the innovation and development of Fin Tech in the banking industry and the market concentration of the banking industry,that is,in the early stage of the prosperity and development of Fin Tech,technological development has the effect of reducing the market concentration of the banking industry,and gradually plays the role of technology concentration in the later stage.The second is that the financial function and institutional development of Fin Tech have a significant negative effect on the market concentration of banking industry,while there are significant business heterogeneity,that is,the impact on the deposit business is significantly greater.In the research on the impact of Fin Tech on the entry barriers of China's banking industry,this paper analyzes and concludes that there are two main ways for Fin Tech to affect the entry barriers of banking industry: first,Fin Tech affects the barriers of potential entrants by changing the cost structure of entry at the technical level;second,it changes the product differentiation entries faced by potential entrants at the business level by decomposing the value chain of banking industry.In the empirical test,155 individual panel data of commercial banks are used for fixed effect regression analysis.The main conclusions are as follows: first,Fin Tech significantly reduces the barriers to entry of banking industry through the innovation and development of financial function,and when the intensity of banking industry access supervision is too high,it will weaken the role of innovation and development at the function level of Fin Tech in reducing the barriers to entry,while the intensity of supervision is relatively low,this weakening effect will gradually disappear;secondly,there is heterogeneity in the reduction of entry barriers by Fin Tech.Urban commercial banks and private banks are more impacted in the process of reducing entry barriers,and all bank deposit businesses are significantly more impacted by potential competition.In the research of the impact of Fin Tech on the product differentiation of China's banking industry,this paper analyzes the mechanism with the function level of Fin Tech as the main analysis dimension.Fin Tech take technology and enterprises as carriers,and influence the product differentiation in the banking market through the function level.This paper also uses 155 individual panel data of commercial banks for empirical analysis of fixed effect.The results show that Fin Tech significantly improves the product differentiation level of banking institutions through functional innovation and development,and has significant heterogeneity among different types of banks.For example,the increase level of product differentiation of joint-stock commercial banks is significantly higher than that of small and medium-sized banks such as urban commercial banks.According to the analysis of theoretical analysis and empirical research results,this paper further summarizes and analyzes the main problems of China's banking market under the multifaceted impact of Fin Tech.First,there is the possibility of technological concentration or monopoly in the banking industry driven by Fin Tech.Second,Fin Tech not only intensifies the competition of banking deposit business,but also causes certain competition chaos.Third,under the influence of Fin Tech,small and medium-sized banks are generally at a disadvantage in the competition.Fourthly,there are some problems in the aspect of supervision,such as the weak competitive supervision of banking industry and the blank of supervision content.This paper puts forward corresponding countermeasures and suggestions for the above problems.The possible innovations of this paper are as follows.Firstly,it constructs a threedimensional theoretical analysis framework of the impact of Fin Tech on the banking market structure,which makes the current research on the impact of Fin Tech on the banking industry more systematic.Based on the economic theories of market structure and information technology,this paper focuses on the theoretical analysis framework of the impact of Fin Tech on the market structure of banking industry,and discusses the impact mechanism of Fin Tech on different aspects of the market structure of banking industry from the perspectives of technology,function and institution.Secondly,it especially studies and quantitatively analyzes the impact mechanism and effect of Fin Tech on market concentration,entry barriers and product differentiation of banking industry.The existing researches pay more attention to the market concentration in the market structure and adopt qualitative analysis methods.Based on the in-depth analysis of the theoretical influence mechanism of Fin Tech on different aspects of banking market structure,this paper uses panel data and fixed effect regression model to test the model hypothesis,and more objectively understands the impact of Fin Tech on banking market structure.Thirdly,the research conclusions and policy recommendations are innovative.The innovative research conclusions of this paper can be summarized into three aspects: first,there is the possibility of technology monopoly in banking industry under the influence of Fin Tech;second,compared with the impact on loan business,Fin Tech has a greater negative impact on market concentration and entry barriers in the field of banking deposit business;third,in the process of the impact of Fin Tech on the market structure of banking industry,the effects on small and medium-sized banks are even greater.Combined with the financial supervision system of our country,it can be found that the current competitive supervision of banking industry is relatively weak.In view of the above research conclusions and problems,this paper mainly puts forward corresponding policy suggestions from the integration development of Fin Tech and banking industry,the transformation of small and medium-sized banks,the supervision of Fin Tech,the competitive supervision of banking industry and so on.