Research On The Future Strategy Of China's Main Commercial Banks Under Internet Finance Period

Nowadays,online finance has deeply penetrated into people's daily life.Online financial products quickly occupy the financial market with its advantages of high efficiency,convenience and high intelligence,which has changed the development pattern of China's financial industry.However,the prosperity of online finance has become a great threat to the main commercial banks in China,which has long been the mainstream components in China's financial industry.The aim of this paper is to discuss the impact of Online finance on China's main commercial banks,and then put forward corresponding suggestions for the future development strategies for them.On the basis of summarizing the previous research results,this paper first put up the definition,characteristics and development status of both Online finance and China's main commercial banks.Then,this paper points out that the prosperity of Online finance weakens the financial intermediary function of China's main commercial banks as well as accelerates financial disintermediation.These are the root cause for the negative impact which Online finance contributes to banks.In order to testify that the Online finance does create negative impact on China's main commercial banks,this paper puts forward two empirical model.The capability of profitability and risk mitigation of banks represents the management condition for banks.Set return on assets(ROA)as the signal of the capability of profitability and non-performing loan ratio as the signal of risk mitigation respectively,select third party payment and P2P as the representative of Online finance,this paper established linear models to testify the impact which Online financial industry brings to these banks.Results indicate negative correlation among them.After this,this paper analyzes the specific reasons for the impact by fishbone diagram.Based on its analysis,for the capacity of profitability,main commercial banks are weak in their products and service,thus lack competitiveness;they cost much more of operation and transaction than Internet financial company,and the homogeneity of their products and services is serious.These are the reasons for the decline of their profitability.For the capacity of their risk resistance,compared with Internet finance,main commercial banks lack competitiveness.Thus,facing the saturated market,their bargaining power is weak.At the same time,their risk control technology is relatively backward.These are the reasons for the decline of their capacity of risk resistance.Accordingly,this paper put forward the suggestions for main commercial banks' future strategy in two aspects.On the one hand,in terms of rescuing its profitability,it is necessary to deepen the differentiation strategy so as to cope with the impact of Internet financial products and services and change the phenomenon of homogenization;it is fundamental to cope with the negative impact of Internet finance to use scientific and technological innovation;at the same time,it is necessary to pay attention to the creation of smart banks to reduce their high costs.Also,in terms of enhancing its risk resistance ability,they should use scientific and technological innovation to strengthen their risk control,which is the direct and fundamental way to deal with its backward technology;at the same time,they are supposed to explore inclusive financial market to expand the market,spread the risk,and further improve its risk resistance ability.It is hoped to provide useful enlightenment for the strategic development and transformation of China's large commercial banks.Hope this paper would provide useful enlightenment for the future strategy decision of China's main commercial banks.