IDEAS home Printed from https://ideas.repec.org/a/eee/chieco/v96y2026ics1043951x26000106.html

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
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1043951X26000106
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.chieco.2026.102660?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Alexandra Spitz-Oener, 2006. "Technical Change, Job Tasks, and Rising Educational Demands: Looking outside the Wage Structure," Journal of Labor Economics, University of Chicago Press, vol. 24(2), pages 235-270, April.
    2. Anders Akerman & Ingvil Gaarder & Magne Mogstad, 2015. "The Skill Complementarity of Broadband Internet," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 130(4), pages 1781-1824.
    3. Daron Acemoglu & David Autor & Jonathon Hazell & Pascual Restrepo, 2022. "Artificial Intelligence and Jobs: Evidence from Online Vacancies," Journal of Labor Economics, University of Chicago Press, vol. 40(S1), pages 293-340.
    4. Li, Wencong & Yang, Xingquan & Yin, Xingqiang, 2024. "Digital transformation and labor upgrading," Pacific-Basin Finance Journal, Elsevier, vol. 83(C).
    5. David H. Autor & Frank Levy & Richard J. Murnane, 2003. "The Skill Content of Recent Technological Change: An Empirical Exploration," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 118(4), pages 1279-1333.
    6. He, Chuan & Mau, Karsten & Xu, Mingzhi, 2021. "Trade Shocks and Firms Hiring Decisions: Evidence from Vacancy Postings of Chinese Firms in the Trade War," Labour Economics, Elsevier, vol. 71(C).
    7. Brad Hershbein & Lisa B. Kahn, 2018. "Do Recessions Accelerate Routine-Biased Technological Change? Evidence from Vacancy Postings," American Economic Review, American Economic Association, vol. 108(7), pages 1737-1772, July.
    8. Catherine J. Weinberger, 2014. "The Increasing Complementarity between Cognitive and Social Skills," The Review of Economics and Statistics, MIT Press, vol. 96(5), pages 849-861, December.
    9. Feng, Ling & Li, Zhiyuan & Liu, Yixuan & Zhou, Yahong, 2025. "Did FinTech steal the cheese of banks? Evidence from Chinese firm exports," China Economic Review, Elsevier, vol. 91(C).
    10. Fung, Michael K., 2006. "Are labor-saving technologies lowering employment in the banking industry?," Journal of Banking & Finance, Elsevier, vol. 30(1), pages 179-198, January.
    11. Ziegler, Lennart, 2021. "Skill Demand and Wages. Evidence from Linked Vacancy Data," IZA Discussion Papers 14511, IZA Network @ LISER.
    12. Ruan, Jia & Jiang, Ruishi, 2024. "Does digital inclusive finance affect the credit risk of commercial banks?," Finance Research Letters, Elsevier, vol. 62(PA).
    13. Zhao, Jinsong & Li, Xinghao & Yu, Chin-Hsien & Chen, Shi & Lee, Chi-Chuan, 2022. "Riding the FinTech innovation wave: FinTech, patents and bank performance," Journal of International Money and Finance, Elsevier, vol. 122(C).
    14. David J Deming & Kadeem Noray, 2020. "Earnings Dynamics, Changing Job Skills, and STEM Careers," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 135(4), pages 1965-2005.
    15. Atalay, Enghin & Phongthiengtham, Phai & Sotelo, Sebastian & Tannenbaum, Daniel, 2018. "New technologies and the labor market," Journal of Monetary Economics, Elsevier, vol. 97(C), pages 48-67.
    16. David Deming & Lisa B. Kahn, 2018. "Skill Requirements across Firms and Labor Markets: Evidence from Job Postings for Professionals," Journal of Labor Economics, University of Chicago Press, vol. 36(S1), pages 337-369.
    17. Wang, Xiao & Chen, Jiantao & Yuan, Yichen, 2024. "Impact of fintech on the loan structure of urban commercial banks in China," Finance Research Letters, Elsevier, vol. 65(C).
    18. Yang, Tong & Zhang, Xun, 2022. "FinTech adoption and financial inclusion: Evidence from household consumption in China," Journal of Banking & Finance, Elsevier, vol. 145(C).
    19. Zhu, Keda & Guo, Lihong, 2024. "Financial technology, inclusive finance and bank performance," Finance Research Letters, Elsevier, vol. 60(C).
    20. Alekseeva, Liudmila & Azar, José & Giné, Mireia & Samila, Sampsa & Taska, Bledi, 2021. "The demand for AI skills in the labor market," Labour Economics, Elsevier, vol. 71(C).
    21. Enghin Atalay & Phai Phongthiengtham & Sebastian Sotelo & Daniel Tannenbaum, 2020. "The Evolution of Work in the United States," American Economic Journal: Applied Economics, American Economic Association, vol. 12(2), pages 1-34, April.
    22. de Vries, Gaaitzen J. & Gentile, Elisabetta & Miroudot, Sébastien & Wacker, Konstantin M., 2020. "The rise of robots and the fall of routine jobs," Labour Economics, Elsevier, vol. 66(C).
    23. Dou, Bin & Guo, SongLin & Chang, XiaoChen & Wang, Yong, 2023. "Corporate digital transformation and labor structure upgrading," International Review of Financial Analysis, Elsevier, vol. 90(C).
    24. David H. Autor & Frank Levy & Richard J. Murnane, 2003. "The skill content of recent technological change: an empirical exploration," Proceedings, Federal Reserve Bank of San Francisco, issue nov.
    25. David J. Deming, 2017. "The Growing Importance of Social Skills in the Labor Market," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 132(4), pages 1593-1640.
    26. David H. Autor & Frank Levy & Richard J. Murnane, 2002. "Upstairs, Downstairs: Computers and Skills on Two Floors of a Large Bank," ILR Review, Cornell University, ILR School, vol. 55(3), pages 432-447, April.
    27. Lawrence F. Katz & Kevin M. Murphy, 1992. "Changes in Relative Wages, 1963–1987: Supply and Demand Factors," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(1), pages 35-78.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Mark Hellsten & Giuseppe Pulito & Sarah Schroeder, 2026. "Automation and the Changing Composition of Skill Demand," RFBerlin Discussion Paper Series 26122, ROCKWOOL Foundation Berlin (RFBerlin).
    2. Koomen, Miriam & Backes-Gellner, Uschi, 2022. "Occupational Tasks and Wage Inequality in Germany: A Decomposition Analysis," IZA Discussion Papers 15702, IZA Network @ LISER.
    3. Koomen, Miriam & Backes-Gellner, Uschi, 2022. "Occupational tasks and wage inequality in West Germany: A decomposition analysis," Labour Economics, Elsevier, vol. 79(C).
    4. Schultheiss, Tobias & Pfister, Curdin & Gnehm, Ann-Sophie & Backes-Gellner, Uschi, 2023. "Education expansion and high-skill job opportunities for workers: Does a rising tide lift all boats?," Labour Economics, Elsevier, vol. 82(C).
    5. David Dorn & Florian Schoner & Moritz Seebacher & Lisa Simon & Ludger Woessmann, 2024. "Multidimensional Skills on LinkedIn Profiles: Measuring Human Capital and the Gender Skill Gap," Papers 2409.18638, arXiv.org, revised May 2025.
    6. Ludger Woessmann, 2024. "Skills and Earnings: A Multidimensional Perspective on Human Capital," CESifo Working Paper Series 11428, CESifo.
    7. Christina Langer & Simon Wiederhold, 2023. "The Value of Early-Career Skills," Working Papers 222, Bavarian Graduate Program in Economics (BGPE).
    8. Tomáš Oleš, 2026. "In-demand skills: a shield against automation—evidence from online job vacancies," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 60(1), pages 1-56, December.
    9. Avner Ben-Ner & Ainhoa Urtasun & Bledi Taska, 2023. "Effects of New Technologies on Work: The Case of Additive Manufacturing," ILR Review, Cornell University, ILR School, vol. 76(2), pages 255-289, March.
    10. David J. Deming, 2021. "The Growing Importance of Decision-Making on the Job," NBER Working Papers 28733, National Bureau of Economic Research, Inc.
    11. David J. Deming & Mikko I. Silliman, 2024. "Skills and Human Capital in the Labor Market," NBER Working Papers 32908, National Bureau of Economic Research, Inc.
    12. David Autor & Caroline Chin & Anna M. Salomons & Bryan Seegmiller, 2026. "What Makes New Work Different from More Work?," NBER Working Papers 34986, National Bureau of Economic Research, Inc.
    13. Josten, Cecily & Krause, Helen & Lordan, Grace & Yeung, Brian, 2024. "What skills pay more? The changing demand and return to skills for professional workers," LSE Research Online Documents on Economics 121450, London School of Economics and Political Science, LSE Library.
    14. David J Deming & Kadeem Noray, 2020. "Earnings Dynamics, Changing Job Skills, and STEM Careers," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 135(4), pages 1965-2005.
    15. Lipowski, Cäcilia & Salomons, Anna & Zierahn-Weilage, Ulrich, 2024. "Expertise at work: New technologies, new skills, and worker impacts," ZEW Discussion Papers 24-044, ZEW - Leibniz Centre for European Economic Research.
    16. Eduard Storm, 2022. "Task specialization and the Native‐Foreign Wage Gap," LABOUR, CEIS, vol. 36(2), pages 167-195, June.
    17. Fan, Jianyong & Liu, Nian & Tang, Wei, 2025. "Skills and the city in China," Regional Science and Urban Economics, Elsevier, vol. 111(C).
    18. Black, Sandra E. & Muller, Chandra & Spitz-Oener, Alexandra & He, Ziwei & Hung, Koit & Warren, John Robert, 2021. "The importance of STEM: High school knowledge, skills and occupations in an era of growing inequality," Research Policy, Elsevier, vol. 50(7).
    19. repec:ehl:lserod:117254 is not listed on IDEAS
    20. Saussay, Aurélien & Sato, Misato & Vona, Francesco & O’Kane, Layla, "undated". "Who’s fit for the low-carbon transition? Emerging skills and wage gaps in job and data," FEEM Working Papers 329079, Fondazione Eni Enrico Mattei (FEEM).
    21. Andrei Ternikov, 2023. "Skill preferences in job postings," Economics Bulletin, AccessEcon, vol. 43(4), pages 1928-1943.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    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

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:chieco:v:96:y:2026:i:c:s1043951x26000106. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/chieco .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.