Effects Of Internet Finance On Chinese Small And Medium-Sized Commercial Banks And Countermeasures

With the rapid development of Internet technology and the gradually opening of China's financial market,some Internet giants,Alibaba,Tencent,and others,get involved in the financial business by making use of their technical advantages,and gradually introduce a series of financial services,such as network credit,Internet third-party payment and the crowdfunding mode.China then enters a new era——The Era of Internet Finance.These Internet financial models have a strong impact on banks which are the mainstay of traditional finance,and will even change the management pattern of banking industry completely.The strong competitiveness and destructive power burst out from Internet finance is both a challenge and opportunity for small and medium-sized commercial banks which have been in bad situations.The way that the small and medium-sized commercial banks deal with this kind of industrial transformation and innovation thinking will has great realistic significance for their own development and survival.This paper first reviews the development process of Internet finance in our country.On the basis of literature review at home and abroad,it puts forward the concept of Internet finance,as well as the characteristics of universality,platformization,informationization,fragmentation and low cost,etc.This paper summarizes several dominating modes of Internet finance,such as peer-to-peer(P2P)network financial,Ali micro-credit,and the crowd-funding financing etc.This paper introduces three main paths to develop Internet finance for banks,including online traditional financial business,self-built e-business platform and social e-business model.Through the analysis tool of SWOT,this paper expounds the advantages and disadvantages of Internet finance,as well as the opportunities and challenges for small and medium-sized commercial banks,which are brought by those advantages and disadvantages.Through case studies,this paper analyzes the innovation operation mode which is the combination of the commercial banks and Internet financial.For example,the China Minsheng Bank cooperates with Chinanet to innovate in Internet finance;Bank of Beijing explores direct-sale bank,Ping-an Bank together with the The Oriental Pay focus on the Internet loans;Shanghai Pu-dong Development Bank along with the Quick Money promote financial reform,etc.Based on these cases,the paper summarizes the experience of developing Internet financial in small and medium-sized commercial banks in China,and then puts forward four countermeasures for the small and medium-sized commercial banks to deal with Internet finance,including actively expanding Internet financial business,building an intelligent network bank,strengthening financial support for internet financial and blending in the industrial chain of Internet financial.