The Research On The Influence Of Internet Finance On Profitability And Risks Of Small-and Medium-sized Banks In China

Since the 21 st century,the development of emerging network technology and the extensive use of mobile terminal equipment,has brought great changes to people's lives.At present,more than half of people in China use the internet.The number of Internet users in China is 730 million,Surpassing the global average,ranking the forefront of the world.At the same time,Alipay and WeChat payment and other emerging forms expanding quickly,China's social network payment market of 2016 has reached 2.9 trillion US dollars.In addition,the network lending and Internet financial products is also expanding rapidly,as of September 2016,Alibaba's Ant Financial has issued a 740 billion yuan of loans to more than 411 million small businesses and entrepreneurs.Internet financial products "Yuebao" has more than 152 million customers.In this context,the banking industry has been widely affected by Internet finance,small and medium-sized banks as an integral part of the banking system,are facing the same impact of Internet finance as the large commercial banks.However,different from large banks,small and medium-sized banks are facing a greater impact because of its smaller asset size,funding channels,network distribution and other aspects of the disadvantage.Based on the theory of financial function,this paper reviews the study of the relationship between Internet finance and financial institutions,describes the course of Internet financial development,summarizes the profitability of small and medium-sized banks and the risks they facing.On this basis,mechanisms of influence of Internet finance on small and medium-sized banks are presented,and puts forward the relevant hypothesis,and then takes the 19 small and medium-sized banks from 2008 to 2015 as the sample,through the individual fixed effect regression model on small and medium-sized banks by the impact of Internet finance was verified.The conclusion shows that the development of Internet finance has a significant negative impact on the profitability of small and medium-sized banks.That is,the profitability of small and medium-sized banks is declining in the face of the impact of Internet finance.In the aspect of risk management,the development of Internet finance has a positive effect on the non-performing loan risk of small and medium-sized banks.The development of Internet finance has exacerbated the bank's bad loan risk,but the Internet financial development has no significant impact on the bankruptcy risk index,indicating that Internet finance did not cause the risk of bankruptcy of small and medium banks.The above conclusions will enable us to have a better understanding of the Internet financial impact on the profitability and risk of small and medium banks,helping small and medium banks to dig out the valuable information from the quantitative relationship between the Internet finance and small and medium-sized banks,grasping the opportunity to carry out business innovation and upgrading.