Impact Of Digital Finance On Business Efficiency Of Local Commercial Banks

In recent years,digital finance has become a hot word.As a fire-new product combined with the traditional financial industry and Internet as well as information technology,digital finance is changing financial institutions and financial business models based on commercial banks as the cores.Since the online 2004 Alipay system,China’s digital finance has experienced the rapid development of more than ten years,and now it has become the leader of the world’s digital finance.The popularity of mobile payments has changed people’s previous consumption habits and payment methods;the rise of network borrowings alleviated the financial problems of SMEs and individual consumers,but they also accelerated the phenomenon of financial "destruction";Internet wealth products met people with diverse investment demand…Digital finance enters the financial industry into the new era of development,exacerbated the industry competition.Under the circumstance,the competitive landscape and business model of traditional banks has been greatly altered.However,the digital finance itself is a "double-edged sword",and banks should grasp opportunities while coping challenges,actively carrying out digital reforms,and enhance their own operating efficiency.Based on this,doing a research on the effect of digital finance on banks’ operational efficiency combines the evolving trend of the present financial sector,which can be used as the theoretical reference of the commercial bank reform and upgrading and improved operations.This article concentrates on the potential affect of digital finance on the operational efficiency of local commercial banks and the mechanism.First,the backdrop and significance of the research are elaborated,and the specific content and analytical routes of this study are planned.Further review the relevant literatures,generalize the analytical routes and results of internal and external scholars in the area,making preparation for the next analysis at theory and empirical level.In view of the previous research outcomes and related theoretical basis,this paper analyzes the status quo of digital finance in theoretical level,the positive and negative impact of digital finance bring to business efficiency of commercial banks,as well as the possible mechanism,then proposes some assumptions.This article selection 24 A-share listing local commercial banks 2012 to 2020 data as sample data for empirical analysis.The business efficiency of commercial banks is measured by the DEA-Malmquist index model,and the current status and change trend of commercial banks are analyzed from absolute values and change trends dimensions.This paper uses the "Digitization_leve"of "The Peking University Digital Financial Inclusion Index of China(2011-2020)"(hereinafter referred to as "PKU_DFIIC"),which is jointly prepared by Peking University and Ant Group,as a proxy variable of digital financial development in all regions in my country,and use static panel data model to analyze how digital finance have an influence on commercial banks operational efficiency.This paper further make use of the intermediary effect model to inspect the effects that digital finance having on business efficiency of commercial banks.According to theoretical analysis and empirical test results,the following conclusions have been summarized:(1)The development of digital finance improves commercial banks’operating efficiency,promoting the technical reform and benign competition of commercial banks.(2)Different kinds of banks have differently influenced by digital finance,and the efficiency improvement in rural commercial banks is greater than the city commercial bank.(3)Digital finance mainly exerts its influence on the operational efficiency of commercial banks by improving their innovation level as well as risk-taking.Financial digital development is in line with the development trend of the times.Local commercial banks in the industry competition should actively embrace the arms of digital finance,speed up digital reform,improve digital level;actively innovate,expand the development space;transform the development thinking,and pay attention to talents cultivate;keep up with the trend of digital development,improve management and improve efficiency in competition.