How Fintech Improves Financial Performance of Banks in China: The Context of Green Finance and ESG

Fintech has become an important driver of digital transformation and sustainable development in the banking industry. However, existing studies report inconsistent findings regarding the relationship between fintech and bank financial performance. This study examines the impact of fintech adoption on the financial performance of Chinese listed commercial banks and investigates the mediating roles of green finance and ESG performance, as well as the moderating role of ownership status. Using panel data from 42 Chinese A-share-listed commercial banks between 2015 and 2024, this study employs panel regression analysis to evaluate the direct, mediating, and moderating relationships among the variables. The results indicate that fintech significantly improves market valuation, operational profitability, and asset utilisation efficiency in Chinese listed commercial banks. In addition, green finance and ESG performance partially mediate the relationship between fintech and financial performance, suggesting that fintech contributes to sustainable financial value creation through sustainability-oriented mechanisms. The findings further show that ownership status significantly moderates the fintech–financial performance relationship, with fintech generating stronger positive effects among non-state-owned banks than state-owned banks. Furthermore, the instrumental variable and other robustness tests confirm the robustness of the findings after addressing potential reverse causality concerns. This paper suggests that the effectiveness of fintech depends not only on technological investment but also on sustainability capabilities and institutional conditions. This study provides empirical evidence on fintech-driven sustainable banking transformation in China and offers practical implications for regulators and commercial banks seeking to promote digital finance and sustainable development.