The Impact Of Digital Transformation On Listed Banks Performance

With the rapid development of digital technology,consumers’ demand for financial services is also changing,and they want to have access to convenient,efficient and secure financial services at any time and any place.At the same time,the financial market has become increasingly competitive,with traditional commercial banks facing competitive pressure from new financial institutions such as Internet finance companies and third-party payment institutions.In order to adapt to market changes and meet consumers’ needs,digital transformation is an inevitable choice for commercial banks.This thesis explores the impact of digital transformation on the performance of commercial banks,and investigates how digital transformation affects commercial banks’ NPL risk and thus bank performance based on the perspective of NPL risk,and empirically explores the impact of digital transformation on commercial banks’ performance and the mediating role of NPL risk,which is not only of theoretical significance but also of practical application.The research ideas of this thesis are as follows: first,the impact of digital transformation on the asset side,liability side,and intermediate business and risk control capabilities of commercial banks is analyzed on the basis of information asymmetry theory,financial innovation theory,long tail theory and platform economy theory.It concludes that digital transformation of commercial banks affects their performance in four aspects: cost reduction and efficiency enhancement,optimization of customer experience,innovation of products and services,and enhancement of risk management capability,and analyzes the mediating role of non-performing loan risk in the process of digital transformation affecting the performance of commercial banks from the perspective of credit risk management.Secondly,the unbalanced panel data of 58 listed commercial banks in China from2013-2021 are then selected as the research sample based on the previous theoretical analysis and research hypotheses,with total asset return as the explanatory variable,citing Peking University’s digital transformation index of commercial banks as the core explanatory variable to measure the degree of digital transformation of commercial banks,and non-performing loan ratio as the mediating variable to measure the risk of non-performing loans,the two models of baseline regression and mediating effect are constructed,and individual fixed-effects model is applied for regression analysis.The results of the analysis demonstrate that digital transformation of commercial banks can improve performance,and the mediating effect of NPL risk in the process of digital transformation on commercial bank performance is significant.To further investigate the impact of digitalization on the performance of commercial banks with different ownership and different asset sizes,two sets of heterogeneity tests are conducted and it is found that state-owned banks and large commercial banks are better able to exert the performance-enhancing effect of digital transformation.Finally,relevant recommendations are made based on the research findings.First,recognize the strategic value of digital transformation and accelerate the pace of digital transformation of commercial banks;second,focus on non-performing loan risk management;third,customized digital transformation strategies should be adopted for different banks.