The impact of fintech on the profitability of state-owned commercial banks in China

Abstract

Fintech is the innovative use of technology in the design and delivery of financial products and services. This study aims to statistically investigate the fintech and other determinants that affect the profitability of six state-owned commercial banks (SOBs) in China using the data from the 2014-2019 period. Theoretically, fintech serves as a disruption for its banking services through adverse impacts on asset business, liquidity business and intermediary business. Empirically, the result shows that the development of fintech has a negative impact on the profitability of SOBs and the regression results from the OLS estimation, the FGLS estimation, the Prais-Winsten estimation and the FE estimation are compared to ensure the validity of the statistical inference.