Commercial Banks’ Internet Financial Products Innovation Research Under The Perspective Of Behavioral Finance

During the past 20 years, Internet is perhaps one of the most things that can profoundly change the human life and social economy development. The rapid changes of network are not only changing economic society people’s living habits constantly, but also has changed the ways of the participants groups’ behavior and activities in the traditional economic and financial market. With the high-speed development of China’s network, Internet financial products and services raised as the times required, and penetrated into every area of public life gradually. According to the relevant reports, the domestic e-commerce market’s total transactions sized up to 13.4 trillion yuan in 2014. There were more and more enterprises and companies becoming to focus on researching and innovating Internet financial products. Traditional commercial banks had also suffered a growing number of challenges from the emerging Internet financial institutions and their products.This paper, starting from the perspective of behavioral finance, systematically reviewed the domestic and foreign scholars’ scientific research achievements in the field of behavioral finance theory and financial products innovation firstly. Then analyzed the generation, development and current situation of the Internet financial products in China. Secondly, it made use of the theories and concepts in behavioral finance about people’s cognitive deviation, psychological biases and preferences to analyze the selections or decision-making’s motivation and reasons of the individual participant who had invested the Internet financial products. Through the VaR model,domestic existing Internet financial products and commercial banks’ traditional financial products were compared in terms of their own benefits and risks. Thirdly,combined with the selections or decision-making’s motivation and reasons analysis of individual participant, it pointed out the advantages, disadvantages and development prospects of the Internet financial products. The final conclusion is that China’s commercial banks must carry out the Internet financial products innovation.This paper also made use of the SWOT analysis method to research the strengths,weakness, opportunities and threats of commercial banks about Internet financial products innovation, and explored the ways for commercial banks. At last, it put forward some hypothetical possible ways of Internet financial products innovation.