Research On The Effects Of Internet Finance On China's Traditional Financial Industry's Efficiency

The financial industry plays an increasingly important role in supporting the stable and sustainable development of the national economy and the financial efficiency influences the whole social economy a lot.With the emergence and rapid development of a series of new financial products services,such as online payment,P2 P net loan,Internet financing and so on,the Internet finance has gradually entered the public view,and has an important impact on the social life and economic activities of the public.Internet finance has a series of advantages which traditional financial institutions do not have,like low threshold,high flexibility,customer-centric and full application of Internet technology.With the springing up of more and more Internet finance companies and the crazy expansion of all kinds of Internet financial business,the traditional financial industry is bound to be affected to some extent.However,relevant qualitative and quantitative research about the impact on the efficiency of China's financial industry is good or bad,strong or weak is still in lack.For that reason,this paper studies the mechanism of effect on efficiency of China's financial efficiency from the development of Internet finance.Based on the review of relevant literature and theoretical basis of the development of Internet finance,this paper analyzes the current situation of Internet finance and the mechanism of effect on efficiency of China's financial efficiency from Internet finance.Then this paper uses Malmquist index model to calculate the productivity index of China's financial industry,and builds a VAR model to analyze the impact of Internet finance on the efficiency of China's financial industry.The results show that Internet finance has a positive impact on the productivity,pure technical efficiency and technical progress index of China's financial industry,however the impact on scale efficiency is negative.Internet finance effectively promotes the technological progress and technological innovation of China's traditional financial industry,and it also has a certain impact on the management mode of the traditional financial institutions at this stage.According to the results,this article puts forward three suggestions: the first is that Internet financial enterprises should strengthen the cooperation with traditional financial institutions,the second is that traditional financial institutions should change business philosophy to improve financial efficiency,the third is that traditional financial institutions should also actively promote the process of internetization.It is helpful to make the development of Internet finance in China more standardized,healthier and more sustainable and improve the efficiency and competitiveness of traditional financial industry.