The Research On The Development Of Internet Finance And Its Impact On China’s Commercial Banks

Internet is considered to be the greatest invention of mankind since it was invited. It is a motivatorwhich greatly promoted the development of society, changing people’s production and life with a very shorttime. Various industries has been penetrated by Internet because of its low transaction costs, the financialindustry is no exception. Internet finance is an emerging field of the integration of Internet technology andfinancial services, which is built on mobile, security and other network technology, with easy, smooth,low-cost advantage and has the Internet "openness, equality, cooperation, sharing" spirit. Internet finance,including but not limited to Third-party Payment, Virtual Currency, P2P Networks Borrowing,Crowd-funding and Internet Sales.The emergence and development of Internet finance has its profound theoretical basis and practicalfoundation. Financial repression and financial deepening theory, financial function theory, the long tailtheory, the platform economic theory are the theoretical basis of Internet finance. In cloud computing, bigdata, social networks, search engines for the development of science and technology on behalf of moderninformation technology to lay the foundation for the development of Internet banking; large Internetcompanies have the quality of financial services enterprises to financial services to make the Internetpossible; cause long-term financial repression the unmet demand for financial services to individualconsumers and small and medium enterprises, these customers become the main target of Internet bankingfor business development.From the perspective of the financial status of development of the Internet, the Internet bankingfeatures to reduce the overall presentation of the financial transaction costs, improve service efficiency,object services are mainly banks ignored the long tail of customers, mainly due to the rapid development ofits energy regulation missing, its expansion is blind, product homogeneity serious, the ability to control theoverall risk is still relatively weak, a higher business risk. These development characteristics of Internetfinance determines its inevitable impact on China’s commercial banks.The rapid development of Internet finance brings China’s commercial banks not noly drawbacks, butalso benefits On the drawbacks side, the Internet will weaken the financial intermediary status of China’s commercial banks, the assets, liabilities, intermediate business of commercial banks were influenced byvarious degrees, reducing the bank’s source of profits, reduced the profitability of banks, while giving ouroperation of commercial banks to bring certain risks. On the plus side, the Internet financial developmentpromotes product innovation of China’s commercial banks to speed up the business structure of commercialbanks to adjust the pace and impact on the entire financial sector, including banking market structure.State-owned banks dominate will be broken, because the Internet banking financial spoiler facing majorreshuffle, which is also conducive to the interest of the banking market development in some way.Compared to Internet Financial enterprises, China’s commercial banks have many advantages such asabundant funds, awareness and high integrity, strong customer base, strong management capacity, highrisk tolerance and abundant finance veteran. The inadequacies of China’s commercial banks are reflected inthree aspects. First, the traditional business model of China’s commercial banks has not changed radically,Second, most of China’s commercial banks’ income is still relied on the savings and loan spread.Third,China’s commercial banks’ fail to make full use of Internet tools and the big data, the services on the longtail of customers are inadequate. China’s commercial banks should seize reshuffled of opportunity causedby Internet finance to accelerate the pace of restructuring.China’s commercial banks should increasedinvestment in information technology, building services banks, and always keep the risk in the first place.Only in this way can China’s commercial banks live a long time.In this paper, the concept of the Internet and related financial theory as a starting point, summed upsome typical characteristics of the Internet business model and finance. On this basis, the financial impactof the Internet on systemic explained the pros and cons of commercial banks, commercial banks throughthe analysis of their advantages and disadvantages, a brief discussion of some deal with the financial impactof the Internet suggestions.