The Effect of Internet Finance on Profitability of Chinese Commercial Banks

With the rapid development of internet finance, its impact on the profitability of commercial banks has become increasingly prominent.Relevant data between 2008—2017 of 16 representative commercial banks in China are picked out to construct a measurement model for the empirical analysis of the effect of internet finance development on the profitability power of commercial banks in China.The results show that, for the commercial banks, the Internet financial development exerts a significantly negative effect on the profitability of commercial banks and positively affects the ratio of their non-interest income.Therefore, China’s commercial banks should actively take full advantage of internet finance to maintain a diversified profit structure and construct some modernized technology-based banks so as to lift themselves off the adverse effects of the Internet financial development.