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Fintech adoption and skill demand of financial institutions

Author

Listed:
  • Sun, Shuang-Xuan
  • Ho, Chun-Yu
  • Zhu, Xi

Abstract

This study examines how financial institutions adjust their skill demand when their customers increasingly adopt financial technology (fintech). By utilizing approximately 1 million job vacancies from financial institutions, including banks, insurers, securities brokerages and investment companies, in China from 2014 to 2022, we find that financial institutions increase their demand and wage premiums for information and communication technology (ICT) skills when more of their customers adopt fintech. Specifically, we instrument customer adoption of fintech with a Bartik-style instrumental variable (IV) utilizing the variation in distance between customers and the fintech hub in China. Further, banks and state-owned financial institutions are the least responsive in their demand for ICT skills to customer adoption of fintech, which suggests that market competition may play a role in driving the skill demand of financial institutions. Finally, we do not find that artificial intelligence (AI) skill demand responds to customers' adoption of fintech.

Suggested Citation

  • Sun, Shuang-Xuan & Ho, Chun-Yu & Zhu, Xi, 2026. "Fintech adoption and skill demand of financial institutions," China Economic Review, Elsevier, vol. 96(C).
    • Handle: RePEc:eee:chieco:v:96:y:2026:i:c:s1043951x26000106
    DOI: 10.1016/j.chieco.2026.102660
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    Keywords

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    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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