The Impact Of Fintech On The Risk-taking Of Commercial Banks

The influence of fintech on the risk-taking of commercial banks has been thoroughly studied by relevant literatures at home and abroad,but only a few literatures focus on the impact of non-bank payment on commercial banks.In recent years,non-bank payment has been booming,and its influence on commercial banks has gradually intensified.It is particularly important to explore this influence.Therefore,this paper studies the impact of non-bank payment on risk taking of commercial banks.Non-bank payment plays a double-edged sword role in the risk-taking of commercial banks.On the one hand,it makes commercial banks actively or passively enhance risk preference and invest in high-risk projects by eroding bank deposit business,robbing bank loan business,impacting bank intermediary business and seizing bank customer resources.The transmission path lies in that the non-bank payment weakens the bank’s ability to absorb reserves and makes the bank less deposit liabilities and more dependent on wholesale financing such as interbank liabilities.Banks will also raise deposit rates to retain customers;The funds of non-bank payment institutions are finally deposited in the bank in the form of agreement deposit,and non-bank payment institutions have strong bargaining power,which will raise the interest rate of agreement deposit.The above three paths all increase the cost of liabilities of commercial banks,and commercial banks have to invest in high-risk projects to compensate for the increase of liabilities.On the other hand,non-bank payment will also have a positive impact on commercial banks.It improves customer coverage,promotes technological progress and improves deposit structure of commercial banks,which is also conducive to business expansion and risk control of commercial banks.In this paper,498 commercial banks including state-owned banks,foreign banks,jointstock banks,rural commercial banks,urban commercial banks,rural cooperative banks and rural credit cooperatives are selected as samples.During the research period from 2013 to 2020,the scale of third-party payment released by iResearch is used as explanatory variable.Using fixed effect model and generalized method of moment,it is proved that non-bank payment will increase the risk-taking level of commercial banks.In addition,the impact results will vary with the micro-characteristics of commercial banks and the regions where they are located.The improvement of commercial bank liquidity level and capital adequacy ratio will reduce the impact of non-bank payments on their risk-taking,the banks which have higher liquid level and capital adequacy ratio have ample liquid assets and capital to cope with the increased debt capital cost.In the short term,there is no need to recoup the rising cost of debt by investing in risky projects with high yields.Due to the unequal popularity of Internet in different regions,the risk-taking level of commercial banks in central and eastern China is significantly increased under the impact of non-bank payment,and the former is higher than the latter,while the western and northeastern regions are not significantly affected.Through the intermediary effect test,it is found that the non-bank payment erodes the deposit business of commercial banks,leading to a sharp decline in the share of deposit liabilities,and banks turn to rely on high-cost inter-bank liabilities,and finally invest in high-risk projects to compensate for the increase in debt costs,thus increasing the risk-taking level of commercial banks.In this regard,this paper proposes that commercial banks should enhance their core competitiveness to reduce the level of risk taking,such as increasing investment in fintech,which will help improve their service quality,reduce management costs,and strengthen the ability to identify risks.At the same time,it is necessary to strengthen cooperation with non-bank payment institutions to improve their customer coverage and create personalized products.In addition,the government also needs to strengthen the supervision of non-bank payment institutions to prevent the risk of non-bank payment industry from being transmitted to commercial banks.