Research On Strategies And Economic Effect Of Small And Medium-sized Banks'Innovation With Fintech

In recent years,technology innovation is changing the traditional economic and financial activities increasingly.The rise of core technologies of Fintech such as big data,cloud computing,AI,block chain and so on,they has driven the development of emerging financial institutions and has had a certain impact on the traditional financial market,especially on the traditional banking system.At the same time,under the pressure of financial separation from media,peer supervision and interest rate liberalization,the traditional banks are facing major challenges.In August 2019,the Central Bank issued the "Financial Science and Technology Development Plan" to guide financial institutions to lay out Fintech.Under this background,the traditional commercial banks need to take actions again to promote their own development,and the application of Fintech conforming to the development trend is undoubtedly a sharp weapon to promote their transformation and upgrading.For small and medium-sized commercial banks,how to lay out Fintech for innovation and upgrading and whether related innovations can bring the expected economic effects are all problems that need to be solved urgently.Based on the transaction cost,functional finance and financial innovation theory,this paper takes Bank of Beijing as an example to make an in-depth analysis of the motivation,specific strategies,economic effects and existing shortcomings of its application of Fintech for innovation and upgrading.The results show that: firstly,the external motives for the bank of Beijing to develop Fintech include the change of customers' consumption habits,the internet finance companies seizing the market and the support by national policies.The internal motives include insufficient ability of risk control,the decline of profitability and the lack of attraction of its own products;Secondly,the Bank of Beijing's main innovation strategies include four aspects: innovation of organizational structure,innovation of products and services,change of marketing methods and channels,and establishment of new risk control methods.Based on the analysis of innovation strategies,it is found that the development of Fintech enhances the market competitiveness and promotes the improvement of operating efficiency.And it reduces the risks in the early stage of loans,but the effect on overall risk control is not good.Investors hold a positive attitude towards the bank's development of Fintech.And then it is found the shortcomings of the innovation strategy include: ignoring the risk after the loan,insufficient business profitability,narrow data application scenarios and excessive reliance on cooperativeenterprises.Finally,this paper puts forward optimization suggestions.It is hoped that it can promote the better development of Fintech innovation of the Bank of Beijing and provide reference for other small and medium-sized banks to carry out innovation and upgrading.