The Impact Of Digital Finance On China’s Commercial Banks’ Intermediate Business Income

Recent years,the digital economy has developed vigorously and the financial market has experienced rapid growth in innovation and technology.China’s commercial banks are also making innovations in their traditional business structures with the help of advanced digital technology.Although digital finance has injected a strong impetus to commercial banks,it has also caused a decline in the efficiency of their traditional deposit and loan business,and at the same time it has affected the intermediate business.The current research mainly focuses on the impact of digital finance on the profitability and risk-taking of commercial banks,but still lacks attention to the intermediary business of commercial banks.On the positive side,commercial banks can make use of digital technological innovation to ease the problem of information asymmetry,improve their own business operation efficiency and speed up the innovation of intermediate business products;On the negative side,the third-party payment generated by digital finance has precisely tapped the customer’s demand with simple process and diversified value-added services,which has impacted the intermediary business of commercial banks.Therefore,it is of great practical significance to study how China’s commercial banks should speed up the transformation of intermediary business and broaden customer channels with the help of digital finance.Based on the relevant theoretical basis,this paper combs out the impact mechanism from both direct and indirect perspectives,applies the two-way fixed effect model and the adjustment effect model to the financial data of 84 commercial banks in China and the weighted provincial inclusive finance index from 2011 to 2020,and tests the relationship between digital finance and banking intermediate business income and the indirect impact path of net interest margin.At the same time,it tests whether the impact of digital finance on the intermediate business income of commercial banks is heterogeneous by grouping regression based on bank size,nature and region.The conclusions are as follows:(1)Overall,the revenue from intermediary business of commercial banks will decrease significantly with the development of digital finance.(2)The net interest margin will indirectly affect the relationship between digital finance and the intermediate business income of commercial banks.The net interest margin will decrease and the negative impact brought by digital finance will be weakened.(3)Commercial banks of different sizes,nature and regions are affected by digital finance to varying degrees.Specifically,from the perspective of bank size,the state-owned banks have been significantly promoted,the shareholding system is not significant,and the local banks have been significantly negatively impacted;From the perspective of banking nature,the impact on the intermediary business of listed banks is not significant,Non-listed banks are significantly negatively affected by the development of digital finance;Geographically,banks in the eastern region were significantly affected,while banks in the central and western regions were not significantly affected.