The Influence of FinTech on the Capital Adequacy Ratio of Commercial Banks in China

IF 2.3 Q2 ECONOMICS

Asia-Pacific Financial Markets Pub Date : 2025-05-20 DOI:10.1007/s10690-025-09538-2

Li Bei, Mohammad Nourani, Qian Long Kweh, Ikhlaas Gurrib, Jawad Asif

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Abstract

This study investigates the impact of FinTech on bank capital adequacy, by analyzing yearly financial indicators of 25 Chinese commercial banks from 2012 to 2021. Using the Pekin Digital Inclusive Finance Index, this study examines the influence of FinTech development on the banking industry by providing theoretical support and practical guidance to understand the mechanisms through which FinTech affects bank capital adequacy in China. Main findings suggests that FinTech initially reduces the capital adequacy ratio (CAR) because of higher marginal costs/risks as compared to benefits/returns. However, as firms increase investments in FinTech, their marginal benefits surpass the costs. In this way, we pay close attention to the interplay between FinTech and banking operations to help comprehend the current trends in the finance industry. Finally, in line with China's financial structure which is predominantly led by commercial banks, this paper proposes a series of practical policy recommendations to promote high-quality financial services and enhance competition. These policy recommendations are designed to address the challenges posed by FinTech and drive the banking industry to confront the financial challenges of the new era, ultimately achieving sustainable development.

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金融科技对中国商业银行资本充足率的影响

本研究通过分析我国25家商业银行2012年至2021年的年度财务指标，探讨金融科技对银行资本充足率的影响。本研究利用北京数字普惠金融指数，考察金融科技发展对银行业的影响，为理解金融科技影响中国银行资本充足率的机制提供理论支持和实践指导。主要研究结果表明，金融科技最初降低了资本充足率（CAR），因为与收益/回报相比，边际成本/风险更高。然而，随着企业增加对金融科技的投资，它们的边际收益超过了成本。通过这种方式，我们密切关注金融科技与银行业务之间的相互作用，以帮助理解当前金融行业的趋势。最后，针对商业银行主导的中国金融结构，本文提出了一系列切实可行的政策建议，以促进高质量的金融服务，增强竞争。这些政策建议旨在应对金融科技带来的挑战，推动银行业应对新时代的金融挑战，最终实现可持续发展。

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

Asia-Pacific Financial Markets ECONOMICS-

CiteScore

3.00

自引率

0.00%

发文量

期刊介绍： The current remarkable growth in the Asia-Pacific financial markets is certain to continue. These markets are expected to play a further important role in the world capital markets for investment and risk management. In accordance with this development, Asia-Pacific Financial Markets (formerly Financial Engineering and the Japanese Markets), the official journal of the Japanese Association of Financial Econometrics and Engineering (JAFEE), is expected to provide an international forum for researchers and practitioners in academia, industry, and government, who engage in empirical and/or theoretical research into the financial markets. We invite submission of quality papers on all aspects of finance and financial engineering. Here we interpret the term ''financial engineering'' broadly enough to cover such topics as financial time series, portfolio analysis, global asset allocation, trading strategy for investment, optimization methods, macro monetary economic analysis and pricing models for various financial assets including derivatives We stress that purely theoretical papers, as well as empirical studies that use Asia-Pacific market data, are welcome. Officially cited as: Asia-Pac Financ Markets