What impact does Internet finance have on traditional banking?

Nowadays, Internet finance is developing rapidly in China, which has a great impact on the whole financial industry, especially the banking industry. Firstly, the basic contents of Internet finance are introduced, then the influence of the development of Internet finance on China's traditional banking industry is briefly described, and some countermeasures are put forward according to the development situation and specific status quo.

At present, China's financial innovation business is booming, and the audience of emerging businesses such as Alipay, Yu 'ebao, online banking and cloud finance is getting wider and wider, thus gradually opening a new mode of financial exploration in China-Internet finance. Its rapid development in China has brought the public into the era of data, information and networking, and even influenced the change of lifestyle. Because of its advantages of fast payment and convenient operation, Internet finance is in sharp contrast with the traditional financial model, which makes the competition in the financial industry fierce and affects the development of the traditional financial model. The connotation of Internet finance 1 Internet finance is a new financial model that realizes financing, payment and information intermediary with the help of Internet technology and mobile communication technology. It is a new development field, which combines the traditional financial industry with the spirit of the Internet. The difference between Internet finance and traditional finance lies not only in the different media used in financial business, but also in the fact that financial participants know the essence of "openness, equality, cooperation and sharing" of the Internet, and make it a new form of participation based on the sharing of resources through the Internet, rather than a simple upgrade of traditional financial technology. 1. 1 internet finance (1) has a high demand for technology. Under the Internet financial model, both parties can communicate and trade directly through the Internet. If it wants to achieve economies of scale and release the cost advantage of the Internet, it must be based on big data and cloud services. The whole electronic online payment process, data collection, analysis and processing involved in the transaction process all need powerful computer technology and network technology as support. (2) inclusive finance with a huge audience. Under the internet financial model, there is no traditional intermediary, no monopoly profit and no transaction cost, so both parties can meet their own transaction needs in time and more people can participate. The financing problem of small and medium-sized enterprises can promote the sunshine and standardization of private finance, and can also be used to improve the level of financial inclusion and promote economic development. (3) De-intermediation of resource allocation. The rise of third-party payment institutions has accelerated the process of financial disintermediation, making the supply of funds bypass the commercial banking system and be delivered directly to the demanders and financiers. Issuance and trading of loans, stocks, bonds, etc. Moreover, the payment of coupons is directly conducted online, which improves the market effectiveness and obviously disintermediates, which is undoubtedly a huge challenge to the traditional financial industry. (4) Information symmetry. Traditional banking mainly deals with information asymmetry business, but under the internet financial mode, information exchange is smoother, and both parties can know each other's information in a timely and comprehensive way through the network, thus reducing information asymmetry, thus reducing the information cost and transaction cost of the financial industry. At the same time, due to the convenience of information transmission, the counterparty's breach of contract can also be dealt with in time and effectively, reducing the loss of breach of contract. 1.2 Functions of Internet Finance (1) Resource allocation and platform functions. At present, Internet finance enterprises are mainly individuals and small business customers. With the help of huge data and powerful data processing technology, they can quickly find customers at a lower cost and understand their consumption behavior and credit rating, which greatly promotes the occurrence of micro-financial transactions. On this platform built by the Internet, both the demander and the supplier of funds can trade freely, flexibly and conveniently, and each other can easily grasp the information of all parties, so as to obtain income more timely and accurately to prevent risks, thus improving the efficiency of resource allocation. (2) payment function. At present, the third-party payment platforms such as Alipay and Tenpay are growing, which greatly facilitates the transaction process of both parties, promotes the development of Internet finance, and weakens the status of commercial banks and traditional payment platforms to some extent. (3) Information collection and processing. Under the internet financial mode, people can use the principle of "cloud computing" to flatten asymmetric and pyramid information, realize the standardization and structure of data, and improve the efficiency of data use. (4) price discovery. Under the Internet financial model, the demand and supply sides of funds directly choose each other on the platform and negotiate the transaction price, thus realizing complete transaction liberalization and marketization. With the promotion of participation and the further increase of trading volume, financial institutions can use this trading mechanism to judge the trend of market interest rates and find prices that are in line with the market, so as to more accurately formulate lending interest rates and price bases in the free market and accumulate experience for realizing real interest rate marketization in the future. 2. The impact of Internet finance on the traditional banking industry 2. 1 Internet finance has developed rapidly, and the traditional banking industry has a crisis of survival. With the emergence and continuous development of internet finance, its transaction volume and scale have greatly increased, mainly in the following aspects: First, the transaction volume of third-party payment has increased rapidly. According to the data, in the first half of 20 13, the transaction scale of third-party payment enterprises in China (the sum of online and offline transactions) reached 6.9 1 trillion yuan, accounting for 66% of the annual transaction volume of 20 1042 1 billion yuan, and the industry growth rate was stable (CCID Consulting data). Since 20 13, third-party payment has vigorously expanded its business in emerging industries. Among them, the balance treasure jointly launched by Alipay and Tianhong Fund has brought more than one million customers and billions of sales in just a few days, which has greatly shocked the industry. In 20 12 years, the total amount of internet payment reached 830 trillion yuan. On the other hand, these data also show that the growth of electronic transaction volume and transaction volume has greatly squeezed the transaction share of traditional financial industries. Second, the scale of Internet credit has expanded rapidly. Alibaba Group, represented by Ali Finance, for example, completed a loan of $4 billion in 20 12, and accumulated loans in 20 13 exceeded15 billion yuan. The number of micro-credit customers has reached 640,000, and the NPL ratio is less than 1% (data of China Electronic Research Center). Third, P2P network loan platform appears. At present, there are hundreds of P2P loan platforms that have appeared since 20 1 1, among which everyone loan and auction loan are the most typical. In the whole process of lending, information and funds, contracts and procedures are all realized through the network, which provides a new model for the development of the financial industry. Fourth, the business expansion of Internet companies. Nowadays, many Internet companies are not limited to third-party online payment, but rely on the accumulation of information and data and the improvement and innovation of technology to continuously expand into the financing field. In the future, they may attack the core business of traditional banks, rob the customer resources of banks, replace the physical channels of banks and subvert the traditional business model and profit model of banks. In just a few years, the rapid development of internet finance has brought great pressure to commercial banks. Internet finance has changed the traditional financial model and become more open and transparent. At the same time, it has advantages over traditional banking in information symmetry, transmission, processing and optimal allocation of resources. Its appearance and development have undoubtedly brought great challenges to the survival of traditional banking. 2.2 Promote the changes in the content and methods of traditional banking services. Faced with the great challenge and impact of Internet finance, traditional banks are bound to make adjustments and changes in business content, service methods and channels. Customers are the basic resources for commercial banks to carry out business. In view of the increasingly mature Internet platform, traditional commercial banks can not only give play to their own advantages, but also innovate and develop new payment and settlement services, thus accelerating financial disintermediation in 2.3. As a lending institution for financing, the intermediary role of the traditional banking industry has gradually failed to adapt to market development. The development of internet finance has changed this situation, accelerated the process of financial disintermediation and weakened the intermediary function of banks. Internet finance only needs an internet information contact platform, and the demanders and suppliers of funds seek useful information through this information intermediary. Once the transaction agreement is reached, the subsequent financing transactions are completed by both parties themselves, without the need for traditional banking intermediaries to facilitate the transaction. 3. Countermeasures for the traditional financial industry 3. 1 The emergence of adjusting strategy and actively innovating the internet financial model undoubtedly challenges the traditional banking industry, especially the big banks, and also provides opportunities for the development of small banks. Traditional financial enterprises, especially commercial banks, should take a correct position in the fierce competition, actively innovate, learn from the advantages of internet finance in technology, customers, timeliness and information, combine their traditional businesses, launch more emerging businesses, develop e-banking platforms, and form advantages while meeting more needs of customers. From this point of view, the emergence of the Internet financial model has also promoted the operation mode of the traditional banking industry, thus promoting the development of the financial industry in a more electronic, convenient and information-based direction. 3.2 Expand Internet business and realize service upgrade. The scale of Internet users in China is huge, exceeding 500 million, which is undoubtedly a huge customer resource for the financial industry, and the Internet will also be the most potential trading platform. Facing the excellent advantages of Internet finance in attracting customers, traditional commercial banks can not only develop new Internet services to attract more customers, but also upgrade their services through the Internet to retain more customers with more detailed and convenient services. Expanding financial business through the Internet weakens the advantages of traditional physical outlets, so that banks are no longer limited to traditional target customers, but attract more small and medium-sized enterprises and individual customers who pursue diversified and humanized services to participate in various financial transactions. 3.3 Based on data and information, improve the efficiency of resource allocation. Under the internet financial mode, information can be transmitted quickly through the database and network credit system, which greatly reduces the transaction cost and greatly improves the efficiency of resource allocation. In this regard, the traditional banking industry also needs to increase technology research and development, establish a database supported by information and technology, collect and publish information by using the network platform, and make use of its own advantages to promote the development of its own business and improve efficiency, and move towards a data-driven bank. 3.4 Clear market positioning, strengthen specialization and differentiated competitive advantage With the rise of Internet finance in the financial field and the development of more online financial enterprises, the traditional banking industry should redefine or consolidate its market positioning and business development direction, provide more professional services, pay attention to the expansion and deepening of a certain business, and form differentiated competitive advantage. On the other hand, we should strengthen the collection and integration of customer information, design different financial products for customers with different risk preferences and credit levels, and set reasonable prices to fully meet the needs of target customers. At the same time, we should bravely face the major tests and challenges in professional skills and level, and finally establish an excellent competitive advantage. 3.5 Improve comprehensive services Although Internet finance has developed rapidly and has obvious advantages, its main target customers are small and micro enterprises and individual customers, mainly engaged in micro-loan business, while traditional commercial banks have more abundant funds, broad customer resources and development experience, perfect infrastructure and widely distributed online stores, which have won the recognition and trust of customer society. After hundreds of years of development, the traditional banking industry has gradually explored a development model of providing comprehensive financial services, which is more advantageous than the online financial companies that rely solely on efficiency, convenience and single business. These are the comprehensive qualities of big banks. In this regard, in the face of the impact of internet finance, commercial banks should continue to play their own advantages, improve the comprehensive service system, and strengthen the satisfaction of customers' all-round financial needs.