Assessing the Impact of Financial Technology Innovations on the Sustainable Profitability of Listed Commercial Banks in China

Yueyao Wang, Xintong Yu, Qingyuan Yao, Yingnan Lu, Wenjia Che, Jingang Jiang and Sonia Chien-I Chen ()
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Yueyao Wang: School of Economics, Qingdao University, Qingdao 266071, China
Xintong Yu: School of Economics, Qingdao University, Qingdao 266071, China
Qingyuan Yao: School of Economics, Qingdao University, Qingdao 266071, China
Yingnan Lu: School of Economics, Qingdao University, Qingdao 266071, China
Wenjia Che: School of Economics, Qingdao University, Qingdao 266071, China
Jingang Jiang: School of Economics, Qingdao University, Qingdao 266071, China
Sonia Chien-I Chen: School of Economics, Qingdao University, Qingdao 266071, China

FinTech, 2024, vol. 3, issue 3, 1-12

Abstract: Commercial banks constitute a crucial segment of China’s financial system, and their efficient operation is directly linked to the development of other sectors within the national economy. The sustainable profitability of these banks is vital for maintaining the stability of China’s financial system. In the context of the current digital economy, it is of great theoretical and practical significance to conduct an in-depth analysis of the impact of financial technology (fintech) development on the sustainable profitability of commercial banks and its underlying mechanisms. Such research can promote the digital transformation of commercial banks, enhance risk supervision policies, and mitigate systemic financial risks. This study utilizes EViews software Version 13 to analyze annual data from 13 listed commercial banks in China over the period from 2011 to 2021. It examines the influence of fintech on the profitability of these banks, considering their unique characteristics and drawing insights from the existing literature on the mechanisms through which fintech affects bank profitability. Employing both a static panel fixed effects variable-intercept model and a dynamic panel generalized method of moments (GMM) model, the empirical findings indicate that fintech development significantly impacts the profitability of listed commercial banks.

Keywords: fintech; commercial banks; sustainable profitability; panel modeling (search for similar items in EconPapers)
JEL-codes: C6 F3 G O3 (search for similar items in EconPapers)
Date: 2024
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