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Your next bank is not necessarily a bank: FinTech expansion and bank branch closures

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Listed:
  • Yuan, Kaibin
  • Li, Wanli
  • Zhang, Weijun

Abstract

This paper presents novel evidence on the effect of FinTech expansion on bank branch closures by exploiting plausibly exogenous variation in FinTech expansion generated by the largest FinTech giant in China. We find that FinTech expansion leads to a rise in both the number and share of branch closures. The debranching effects are significant only for those product ranges overlapped between the bank and FinTech company, implying that the bank’s presumably advantageous products can, in fact, be replaced by new rivals from FinTech. Our findings provide a window to understand how the global debranching trend occurs.

Suggested Citation

  • Yuan, Kaibin & Li, Wanli & Zhang, Weijun, 2023. "Your next bank is not necessarily a bank: FinTech expansion and bank branch closures," Economics Letters, Elsevier, vol. 222(C).
    • Handle: RePEc:eee:ecolet:v:222:y:2023:i:c:s0165176522004220
    DOI: 10.1016/j.econlet.2022.110948
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Shi, Zhengxu & Xia, Yufei & He, Lingyun & Sun, Naili & Zheng, Qiong, 2025. "Can internal regulatory technology (RegTech) mitigate bank credit risk? Evidence from the banking sector in China," Research in International Business and Finance, Elsevier, vol. 75(C).
    2. Shi, Xin & Zhou, Yuwen, 2025. "The effects of FinTech development on corporate employment," International Review of Economics & Finance, Elsevier, vol. 101(C).
    3. Tian, Yulu & Su, Qin, 2024. "Digital transformation, information and lending distance -Evidence from Chinese bank branch data," Economic Analysis and Policy, Elsevier, vol. 84(C), pages 545-560.
    4. Mohammad Ali Yousef Yamin & Omima Abdalla Abass Abdalatif, 2024. "Examining consumer behavior towards adoption of quick response code mobile payment systems: transforming mobile payment in the fintech industry," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 11(1), pages 1-11, December.
    5. Cheng, Xiaoqiang & Guo, Wenjuan & Teng, Yue & Yao, Dingjun & Zhou, Hua, 2025. "Impact of fintech on carbon emissions in China: Evidence from the perspectives of green finance and financial efficiency," Finance Research Letters, Elsevier, vol. 86(PB).
    6. Rizwan, Muhammad Suhail & Ahmad, Ghufran & Qureshi, Anum, 2025. "Central bank digital currency and systemic risk," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 99(C).
    7. Ao, Zhiming & Ji, Xinru, 2025. "Strategic cooperation in fintech field and efficiency of commercial banks," The North American Journal of Economics and Finance, Elsevier, vol. 76(C).
    8. Yanmin Shi, 2024. "Digital finance and corporate breakthrough innovation: Evidence from China," PLOS ONE, Public Library of Science, vol. 19(7), pages 1-38, July.
    9. Ye Guo & Xiaoying Liu & Mingming Zhang, 2025. "From advantage to disadvantage: how FinTech impacts small banks?," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 11(1), pages 1-33, December.
    10. Wang, Qi & Liu, Ming & Xie, Kai, 2025. "Disappearing bank Branches: Evidence from China household finance survey," International Review of Economics & Finance, Elsevier, vol. 98(C).

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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
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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