Has fintech affected the credit loan scale of urban commercial banks in China?

Abstract

ABSTRACT This study aims to empirically examine the impact of financial technology (fintech) on the credit loan scale of urban commercial banks in China. Using panel data from Chinese urban commercial banks spanning 2011 to 2020, the study employs the Financial Technology Development Index to measure fintech development. The findings indicate that fintech significantly increases the credit loan scale of urban commercial banks. Heterogeneity analysis reveals that the magnitude of change in credit loans is more pronounced in urban commercial banks with larger scales and higher governance levels. The findings further indicate that fintech improves the information acquisition and processing capabilities of urban commercial banks, reducing information asymmetry and expanding the scope of credit services, particularly benefiting small and medium-sized enterprises. The study underscores the importance of technological innovation for banks to enhance risk assessment and address liquidity challenges. It also highlights the need for regulatory supervision to ensure the responsible use of fintech. Overall, the study contributes to the understanding of how fintech influences the credit loan scale of urban commercial banks and offers insights for banks and policymakers to leverage fintech for sustainable financial development.