The Impact On China’s Commercial Banking System By Internet Finance

With the rapid development of the Internet finance in recent years, it becomes an important wayof deepening system reform and perfecting innovation in financial field of China. It initially developedfrom the third-party payment companies to the network lending business based on the rise of large scale ofe-commerce platform. Currently it moves to the stage of online banking, online insurance and onlinesecurity markets. Along with its increasing development of the Internet finance, its impacts draw attentionfrom society in different fields; however, it also makes effects on the traditional financial system of Chinaespecially the system of Chinese commercial banking. It is evidently noticed that there is some impact onsettlement and credit facilities operated by the commercial banks because of the emergence of third-partypayment and network lending. This paper will start with the rise of the Internet finance and its currentdevelopment. Additionally, it will conduct an analysis regarding its competition and cooperation with thetraditional commercial banking of China. The purpose of this paper is to give some recommendations forthe future development of Chinese commercial banking by trying to find out the inherent advantages of theInternet finance with its increasingly deepening development.With the concept of the Internet finance as the beginning of the paper, it continues to describe thecurrent situation of its development. Meanwhile, the developments of Chinese commercial banking andinformation technology (IT) are closely related to each other. This can be concluded from the process ofChinese commercial banks starting electronic banking under the development of IT. This paper will choosethe third-party payment and network credit as two main modules after an integration of the current forms ofthe Internet finance in China. There will be a comparative analysis between the online banking businessfrom the traditional commercial banks and the credit business from the small and micro enterprises, whichwill also consider their competition and cooperation. This analysis will be used to identify their strengthsand weaknesses. As well it will present some reasonable predictions with regard to the future developmentof the Internet finance. In order to achieve the combination of theory and practice, this paper will take anexample of Alibaba Group-the successful Internet-based e-commerce business to analyze its recentfinancial products. In the end, this paper will give some reasonable suggestions for the future development ofChinese commercial banking under the background of the rise of the Internet finance.