Research on the impact of financial technology on risk-taking of commercial banks

Fintech has driven both the diversification of commercial banks' operations and increased market competition, posing challenges to their risk management. This paper selects the panel data of 154 commercial banks from 2011 to 2023 and constructs a fintech development indicator based on strategic partnerships with external fintech firms to examine its impact on banks' risk-taking behavior. The findings are as follows: (1) Fintech significantly raises the risk-taking levels of commercial banks, with the result remaining robust after various sensitivity tests. (2) The impact of fintech on risk-taking is heterogeneous. It has a more substantial effect on smaller banks compared to larger ones, and is more pronounced in regions with lower marketization levels. (3) Fintech affects commercial banks' asset-liability structures through market crowding-out effects and provides technological support for innovation through technological spillover effects, both of which significantly enhance risk-taking. Therefore, this research offers better understanding of the intrinsic relationship between fintech and commercial banks' risk-taking.