The Effect Of Banking Innovation On Performance In The Background Of Internet Finance

The deep integration of technology and finance has shaped a new form of development—Internet finance.With the rapid development of third-party payment,p2 p online loan,crowdfunding-based Internet finance and the transaction amount has reached new heights and transaction scale still continues to expand.At the same time,the sudden emergence of Internet finance has broken the time and space constraints of traditional banking operations,which has brought unprecedented challenges to China's commercial banks.Bank's business such as individual deposits,personal finance,and secured loans are also affected.Therefore,it is particularly important for commercial banks to use novel Internet technology and to give full play to their own characteristics when they are faced with impacts and competitions of Internet finance,.This article believes that China's commercial banks have certain problems such as solidified management systems,single business models and unclear market positioning.China's commercial banks can turn crisis into opportunities and maintain competitiveness in a complex financial environment,as long as they can closely follow the pace of Internet financial development,actively study Internet technologies,change development strategies and carry out product innovations,service innovations and systems innovations.This article analyzes the literature review,expounds the impact of internet finance on bank performance and takes functional finance theory and financial innovation theory as basement.This article also analyzes the impact mechanism of bank financial innovation on performance.Then this article uses the "text mining method" to construct the bank's financial innovation index which is described from four dimensions of the financial function.An empirical analysis is made based on the data of 25 listed banks from 2007 to 2016.The results show that financial innovation of banks has a positive effect on bank performance.Bank performance can be improved by optimizing the bank's resource allocation,improving the bank's system of payment and settlement and optimizing wealth management.After verifying the relationship between financial innovation and performance,we study the effect of different types of banks on financial innovation.The results show that the financial innovation of non-state-owned banks has a more significant impact on performance,while the financial innovation of state-owned banks is not effective and has no significant effect on performance.Finally,combining the results of empirical analysis,it is suggested that commercial banks,especially state-owned banks,should cultivate innovative ideas,actively cooperate with Internet companies,and use advanced Internet technology so as to promote financial innovation and bank's performance.