Hunan Normal University Researchers Release New Study Findings on Risk Management (Impact of Fintech on Bank Risk-Taking: Evidence from China)

2021 JUN 21 (NewsRx) -- By a News Reporter-Staff News Editor at Insurance Daily News -- New study results on insurance have been published. According to news reporting from Changsha, People’s Republic of China, by NewsRx journalists, research stated, “This article focuses on the relationship between Fintech and bank risk-taking behavior.”

Financial supporters for this research include the National Social Science Fund of China.

The news reporters obtained a quote from the research from Hunan Normal University: “Since Robo-Advisor is one of the mature applications of Fintech, we found that the development of Fintech will have a greater impact on small and medium-sized banks through the establishment of a Robo-Advisor model. This paper uses a benchmark regression model to analyze the municipal digital financial inclusion index compiled by Peking University and the annual report data of 155 small and medium-sized banks from 2011 to 2016. We found that the development of Fintech has significantly reduced bank risk-taking level. This result is still valid after the robustness test of replacing the bank’s risk-taking index and replacing the Fintech development index. We used the urban innovation index as an instrumental variable to deal with the endogenous problem, and obtained consistent estimation results. The test of the intermediary effect shows that the development of Fintech will affect the bank risk-taking through channels such as the bank’s internal interest margin, management capabilities, the bank’s external competition intensity, and residents’ saving willingness.”

According to the news editors, the research concluded: “Heterogeneity analysis shows the reduction effect of Fintech on bank risk-taking is more pronounced in banks in eastern and western regions in China, the large banks and the urban commercial banks.”

For more information on this research see: Impact of Fintech on Bank Risk-Taking: Evidence from China. Risks, 2021,9(99):99. (Risks - http://www.mdpi.com/journal/risks). The publisher for Risks is MDPI AG.

A free version of this journal article is available at https://doi.org/10.3390/risks9050099.

Our news journalists report that more information may be obtained by contacting Liurui Deng, Business School, Hunan Normal University, Changsha 410081, People’s Republic of China. Additional authors for this research include Yongbin Lv, Ye Liu, Yiwen Zhao.

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