The Effect Analysis Of Financial Innovation On Cost Efficiency In Commercial Banks

With the financial policy gradually opening and foreign Banks entering our country, the environment of commercial banks’management has been greatly influenced, which makes commercial banks’industry more competitive. At the same time, due to the limited of the capital, the space of traditional business profit in commercial banks is shrinking. Therefore, how to develop special off-balance-sheet business and traditional business by financial innovation and increasing profitability and competitiveness directly relates to the survival and long-term development of the commercial banks.This paper aims to analyze the influence between the financial innovation and the cost efficiency in commercial banks, and finds out the financial innovation factors that can influence commercial banks’cost efficiency more notable. According to these significant factors, we can know how to improve the commercial banks’cost efficiency based on financial innovation.Firstly, this paper describes and summarizes the relevant theory and the current situation of research in commercial banks’financial innovation; secondly, this paper measures the cost efficiency of the sample commercial banks by the SFA, and analyzes the influence of financial innovation by Tobit model. The results shows that, the equity structure, human capital, business process improving and off-balance-sheet business have a more notable influence on cost efficiency of commercial banks.In the end, according to the estimate results, this paper puts forward some advices to improve the cost efficiency of commercial banks based on the financial innovation.