Research On The Impact Of Internet Finance On The Profitability Of Different Types Of Commercial Banks In China

The rapid development of information technology has brought great changes to various industries.When internet companies began to get involved in traditional financial services,they have developed a new financial model,called internet finance.After continuous reform and innovation,internet finance has penetrated into every aspect of life and has spawned six business models.With the characteristics of fast and efficient processing of business and various innovation modes,the emergence of internet finance has broken the original market structure and competed with commercial banks in many aspects.Traditional finance has been greatly affected by Internet finance.This paper first makes a simple analysis of the development and status quo of China's Internet finance,the types and profitability of China's commercial banks,and then analyzes the impact of Internet finance on the profitability of different types of commercial banks.It explains the impact of internet finance on banking positions from three aspects: targeting customers,developing de-intermediation platforms and efficiently completing financial functions.At the same time,it analyzes the two major incomes of commercial banks(interest income and non-interest income),and clarifies how internet finance can replace the intermediary business of commercial banks and divert its deposit business and loan business.Theoretical research shows that internet monetary funds and internet credit mainly affect the profit margin of commercial banks by affecting the deposit size,capital cost and loan business of commercial banks,thus impacting their profitability;the commission income from commercial banks is mainly reduced by the third-party payment.In general,the development of internet finance has had a negative impact on the profitability of commercial banks,and different types of commercial banks have been affected to varying degrees.On the basis of theoretical analysis,this paper takes the return on investment(ROA)of commercial banks as the explained variable,selects third-party Internet payment,money fund and P2 P online loan as explanatory variables,and conducts regression analysis on the 19-term data of 23 banks.The results reveals that the coefficients of the three explanatory variables are all negative,which have a negative impact on the profitability of commercial banks.Moreover,among the three major businesses,P2 P online lending business has the least impact on the profitability of commercial banks.Third-party Internet payment has the greatest impact on the profitability of commercial banks.This is because P2 P online lending business and commercial bank loan customers have low overlap,and the relationship between both of which are more complementary than competitive.However,third-party internet payments have formed fierce competition with commercial banks in assets,liabilities and intermediate businesses.Among the three types of banks,internet finance has had the biggest impact on the profitability of city commercial bank.The city commercial banks have the highest proportion of the highest interest income,small assets,weak deposit-taking capacity,and lack sufficient capital and efficient teams to carry out various business innovations.Besides,the loan business customers and P2 P online loan business customers are highly overlapped.On the contrary,large-scale state-owned banks have large assets,extensive customer resources,and efficient management and flexible innovation of joint-stock commercial banks,which bring certain advantages when they compete with internet finance.Finally,based on the theoretical and empirical results,this paper proposes more targeted countermeasures for banks to help them transform and develop.