Digital transformation in banking: Curbing procyclical leverage to strengthen financial stability

IF 7.5 1区经济学 Q1 BUSINESS, FINANCE

International Review of Financial Analysis Pub Date : 2025-04-04 DOI:10.1016/j.irfa.2025.104205

Li Wang , Zeyu Huang , Yanan Wang , Yining Yang

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Abstract

Digital transformation is revitalizing the banking system. By applying NLP techniques, this study aims to analyze the trends of digital transformation in Chinese commercial banks and explore how this transformation contributes to banks' deleveraging and stabilization. We construct a framework for digital transformation in banking across five dimensions, emphasizing the critical role of digitalized risk control. The findings reveal that digital transformation, particularly when integrating digitalized risk control, significantly contributes to deleveraging. Among the sub-dimensions, technological digitalization, risk control digitalization, and product digitalization have strong effects in reducing bank leverage. The deleveraging impact of digital transformation is especially pronounced in banks owned by the government, with higher capital adequacy ratios, in regions with weaker financial regulation, with a fintech subsidiaries, and listed as systematically important. In terms of mechanisms, digital transformation helps mitigate procyclical leverage behavior, thereby stabilizing the financial system. Shifting the focus to off-balance sheet activities and systemic risk, an intriguing phenomenon emerges: banks with fewer types of wealth management products, a preference for shorter maturities, and higher yield caps demonstrate a more pronounced deleveraging effect during digital transformation. Additionally, the dual effects of digital transformation on both deleveraging and systemic risk control are also examined.

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银行业数字化转型：抑制顺周期杠杆，加强金融稳定

数字化转型正在振兴银行体系。本研究运用自然语言处理技术，分析我国商业银行数字化转型的趋势，探讨数字化转型对银行去杠杆和稳定化的促进作用。我们从五个维度构建了银行业数字化转型的框架，强调了数字化风险控制的关键作用。研究结果表明，数字化转型，特别是整合数字化风险控制时，对去杠杆化有显著贡献。其中，技术数字化、风控数字化和产品数字化对降低银行杠杆率有较强的作用。在资本充足率较高的政府所有银行、金融监管较弱的地区、拥有金融科技子公司、被列为系统重要性的银行中，数字化转型的去杠杆影响尤为明显。在机制方面，数字化转型有助于缓解顺周期杠杆行为，从而稳定金融体系。将焦点转移到表外活动和系统性风险上，就会出现一个有趣的现象：理财产品种类较少、偏好期限较短、收益率上限较高的银行，在数字化转型期间表现出更明显的去杠杆效应。此外，还研究了数字化转型对去杠杆和系统性风险控制的双重影响。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

International Review of Financial Analysis BUSINESS, FINANCE-

CiteScore

10.30

自引率

9.80%

发文量

366

期刊介绍： The International Review of Financial Analysis (IRFA) is an impartial refereed journal designed to serve as a platform for high-quality financial research. It welcomes a diverse range of financial research topics and maintains an unbiased selection process. While not limited to U.S.-centric subjects, IRFA, as its title suggests, is open to valuable research contributions from around the world.