The impact of fintech on commercial banks

I. The impact of financial technology on the intermediate business of commercial banks.

1. Payment and settlement has always been one of the most basic and traditional intermediate businesses of commercial banks. According to the theory of information asymmetry, commercial banks, as financial intermediaries, help to alleviate information asymmetry to a certain extent, based on the information advantage and the resulting monopoly position, making commercial banks in the field of payment and settlement to form a long-term, exclusive exclusive advantage. And to third-party payment, mobile payment as a typical representative of financial technology has shaken this advantage of commercial banks, compared with the services provided by the bank, third-party payment, mobile payment greatly reduces the cost, which is based on cloud computing and other technologies can be highly efficient storage and computation of customer data and information, thus more effectively alleviating the information asymmetry, and can truly realize anytime, anywhere, in any way to carry out Payment and settlement, more convenient and efficient.

2. More crucially, money and payment methods have a natural connection. Therefore, the more far-reaching impact of financial technology on payment and settlement is reflected in the trend of digitization of currency. Digital cryptocurrency with blockchain as the core technology builds a global distributed account system through which payment activities can be accomplished without the need for banks to support them as intermediaries. Although there are still many controversies about the monetary properties of digital currencies, legalization and other related issues, it is undeniable that digital currencies as a new phenomenon will inevitably have further development in the future, and the regulatory model and regulatory system of digital currencies, the possibility of central bank issuance of digital currencies and the pros and cons and other issues caused by it have also triggered more and more attention and discussion.

The impact of fintech on the asset side and liability side of commercial banks.

1. As far as the asset side is concerned, the most important and traditional asset business of commercial banks is the loan business. On the liability side, the most important is the deposit business; banks have two main sources of funding for liabilities - retail deposits and wholesale financing, of which, retail deposits have a longer term and are mostly protected by the deposit insurance system, while wholesale financing has a shorter term.

2. Some experts believe that the traditional lending business of commercial banks will be the first to be impacted by Internet finance. Commercial banks are burdened with a large number of regulatory costs and fixed costs, while the Internet finance can be lower costs to complete the credit assessment of customers and credit placement, to provide customers with more cost-effective consumer financial services, which will undoubtedly compress and squeeze the profit space of commercial banks. Secondly, the liability side of the commercial banks facing the "disintermediation" pressure to further increase, part of the deposits from the commercial banks and turn to the money market fund.

Third, financial technology to accelerate financial disintermediation.

From the above impact of fintech on commercial banks' intermediary business, liability business and asset business, it can be seen that no matter which aspects of the impact and influence, the development of fintech will accelerate the trend of "disintermediation" of commercial banks. From the perspective of payment, third-party payment and mobile payment have payment and settlement functions such as collection and payment, transfer and remittance, and automatic account splitting, which are effective substitutes for the traditional payment business of commercial banks; from the perspective of the asset side, the capital needs of enterprises and individuals can be matched with the demand through the Internet platform and successfully financed, which reduces the reliance on the traditional credit of commercial banks; from the perspective of the liability side, the deposit interest rate of commercial banks has not yet formed an effective substitute for the traditional credit of commercial banks. From the perspective of the liability side, since the deposit interest rates of commercial banks have not yet formed an effective market pricing mechanism, fintech essentially promotes the process of interest rate marketization, commercial banks are facing a certain amount of deposit "disintermediation" pressure.

Four, the impact of financial technology on the commercial bank customer base.

Big data, cloud computing and other technologies possessed by fintech can make the credit behavior and credit records of small and medium-sized micro-enterprises get a true and complete picture. According to Anderson's "Long Tail Theory", micro and small enterprises belong to the "long tail" of financial service demand, and in the traditional financial market, micro and small enterprises are often excluded from the formal financial system; and Internet finance can help solve the problem of "long tail" financial services. The "long tail" of micro and small enterprises financing problems, to a certain extent, to make up for the supply gap of the traditional financial system, enhance the allocation efficiency of financial resources. Of course, this broader coverage of the customer base, rather than an impact on commercial banks, rather than a useful supplement to the financial functions of commercial banks; but, on the other hand, the characteristics of the Internet finance itself, determines its satisfaction of the financing needs of small and medium-sized enterprises is very easy to form the external economy, economies of scale, economies of scale, and so on the multiple effects of economies of scale, which is undoubtedly the Internet enterprises or small and medium-sized banks have the ability to compete with large banks. This is undoubtedly an opportunity for Internet enterprises or small and medium-sized banks to compete with large banks. Therefore, fintech will inevitably also bring increased competition in the banking industry.