FinTech: The disruptive force reducing bank competition pressure

Xudong Zhang and Zhihui Li

Emerging Markets Review, 2025, vol. 65, issue C

Abstract: This study develops a news-based FinTech index and evaluates the bank competition pressure using a weighted branch ratio. Analyzing data from 276 Chinese banks from 2011 to 2022, we find that adopting FinTech effectively alleviates competition pressure among banks in local markets. This effect can be attributed to three primary mechanisms: enhanced cost efficiency, upgraded human resource structure, and expanded business scope and customer base. Additionally, FinTech exerts a greater influence on banks with lower state-owned equity, those facing stricter regulatory policies, and banks operating in larger informal financial markets.

Keywords: Bank FinTech; Bank competition pressure; Cost efficiency; Human resource structure; Financial innovation (search for similar items in EconPapers)
JEL-codes: G20 G21 O33 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ememar:v:65:y:2025:i:c:s1566014124001328

DOI: 10.1016/j.ememar.2024.101237

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