Analysis of Negative Correlation and Heterogeneity between Development of Financial Technology and Profitability of Commercial BanksBased on Panel Data of 210 Banks in China

Based on the panel data of 210 Chinese commercial banks from 2011 to 2018, this paper uses fixed effect estimation to examine the impact of financial technology development on bank profitability. The results show that there is a significant negative correlation between the development of financial technology and bank performance, that is, the development of financial technology significantly weakens bank performance; the conclusion is robust on the basis of different financial technology indicators, different bank profitability indicators and endogenous analysis. On this basis, this paper also studies the heterogeneity of the above relationship, and finds that loose monetary policy will weaken the negative effect of financial technology on bank profitability. In addition, for commercial banks with stronger monopoly power, the adverse impact of financial technology on their performance will also be alleviated.