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The Impact of FinTech Development on Bank Operating Performance: An Empirical Analysis Based on Listed Banks

In: Proceedings of the 2025 International Conference on Financial Innovation and Marketing Management (FIMM 2025)

Author

Listed:
  • Haonan Li

    (Peking University, School of Software and Microelectronics)

Abstract

The rapid development of FinTech has reshaped the banking landscape while exerting complex impacts on commercial bank’s profitability. Based on panel data from China’s A-share listed banks from 2007-2022, this study integrates publicly available data from the CSMAR database, Choice Financial Terminal, and commercial bank annual reports. Employing machine learning-based text analysis to construct a FinTech development index system, we systematically examine its linear effects and heterogeneous transmission mechanisms. The findings reveal that FinTech significantly suppresses bank profitability in the short term. Although technological applications partially mitigate this impact by expanding non-interest income, deposit diversion and technology investment costs exacerbate liability-side pressures, resulting in an overall negative net effect. To address these challenges, commercial banks should establish differentiated governance frameworks, promote categorized transformation strategies, and advance the coordinated network development of “FinTech-banking-real economy” to balance short-term costs with long-term technological dividends. This study offers empirical insights into the evolving relationship between FinTech and banking, highlighting key challenges and transformation paths. It provides a valuable reference for promoting sustainable development in the financial sector.

Suggested Citation

  • Haonan Li, 2025. "The Impact of FinTech Development on Bank Operating Performance: An Empirical Analysis Based on Listed Banks," Advances in Economics, Business and Management Research, in: Maizaitulaidawati Md Husin (ed.), Proceedings of the 2025 International Conference on Financial Innovation and Marketing Management (FIMM 2025), pages 179-188, Springer.
    • Handle: RePEc:spr:advbcp:978-94-6463-874-5_23
    DOI: 10.2991/978-94-6463-874-5_23
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