The impact of fintech on the efficiency of urban commercial banks in China-based on super slacks-based measures with undesirable output

Abstract

This study endeavours to elucidate the influence of financial technology (fintech) on the operational efficiency of urban commercial banks in China. By scrutinizing the integration of Internet-based fintech solutions, it seeks to illuminate their potential for streamlining banking processes, elevating customer experiences and augmenting the precision of credit assessments and lending decisions through sophisticated data analytics and risk management tools. This research evaluates the efficiency of Chinese urban commercial banks employing the Super Slacks-Based Measure (Super-SBM) which incorporates undesirable output. Furthermore, it leverages the System Generalized Method of Moments (System GMM) to investigate fintech’s specific impact on urban commercial bank efficiency across various Chinese regions. The findings underscore fintech’s pivotal role in catalyzing digital transformation within banks, thereby bolstering operational efficiency and customer satisfaction. Moreover, this study highlights the critical importance of fintech in fortifying risk management capabilities within the banking sector. The insights gleaned from this research contribute to the banking industry’s sustainable growth and competitive resilience. Additionally, the findings furnish policymakers with empirical evidence to support the strategic integration of fintech and the optimization of banking service processes. Urban commercial banks can streamline operations, enhance customer experiences, refine credit assessments and ultimately attain higher efficiency and long-term sustainability levels in the rapidly evolving financial landscape by harnessing the transformative potential of fintech.