Digitalization and stability in banking sector: a systemic risk perspective

Qingjun Zhang (), Yiding Ou () and Rong Chen
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Qingjun Zhang: Tianjin University of Finance and Economics
Yiding Ou: Tianjin University of Finance and Economics
Rong Chen: Tianjin University of Finance and Economics

Risk Management, 2023, vol. 25, issue 2, No 4, 29 pages

Abstract: Abstract This paper analyzes the relationship between digitalization and systemic risk of commercial banks using data from listed commercial banks from 2010 to 2019. The findings show that the higher the level of digital awareness and the richer the digital products, the lower the systemic risk of banks; the higher the complexity of banks’ digital organization, the higher the systemic risk of banks. The digital development of banks reduces systemic risk overall by optimizing the structure of banks’ deposits and loans, and optimizing the structure of banks' deposits and loans at other levels. The degree of impact of digitalization on the systemic risk of banks differs by their attributes, and regional commercial banks are more affected than large state-owned banks and joint-stock banks. This paper provides useful references for improving banks' refined management, establishing corresponding risk warning mechanisms, and avoiding the risks that information technology may bring.

Keywords: Listed banks; Bank digitization; Systemic risk; Non-interest income; CoVaR (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1057/s41283-023-00116-2

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