Finance Research Letters 55 (2023) 103857

Contents lists available at ScienceDirect

Finance Research Letters

journal homepage: www.elsevier.com/locate/frl

Impact of the development of FinTech by commercial banks on

bank credit risk
Yujin Zhang a, b, Shujun Ye a, *, Jie Liu a, Lihong Du b
a
School of Economics and Management, Beijing Jiaotong University, Beijing, 100044, China
b
Department of Humanities and Management, Hebei University of Chinese Medicine, Shijiazhuang, 050200, Hebei, China

A R T I C L E I N F O A B S T R A C T S

Keywords: This paper constructs FinTech development indicators of commercial banks through web crawler,
FinTech and uses the data of 138 Chinese commercial banks from 2013 to 2021 to investigate the impact
Bank credit risk of the development of FinTech of commercial banks on bank credit risk. The results show that the
Digital risk control
development of FinTech significantly reduces the credit risk level of commercial banks, among
which the application of FinTech in the digital risk control of banks plays an important role in
reducing bank credit risk, and the development of FinTech in small and medium-sized banks has a
greater inhibitory effect on credit risk.

1. Introduction

As an important part of the financial industry, commercial banks take the lead in facing the challenges and opportunities brought by
FinTech. On the one hand, the development of FinTech by commercial banks has promoted the business innovation of banks and
improved the ability of risk prevention and control. On the other hand, the technical risks and operational risks existing in the
development of FinTech by commercial banks will also affect credit decisions, which inevitably affect bank credit risk. FinTech
promotes financial stability through artificial intelligence, cloud technology and other channels. Financial institutions should embrace
FinTech, develop and create a favorable FinTech ecosystem (Daud et al., 2022). As the main body of traditional financial institutions,
commercial banks begin to actively apply FinTech for strategic transformation. How does the development of FinTech of commercial
banks affect their credit risk? Can the application of FinTech in the prevention and control of credit risk reduce the credit risk of
commercial banks? In the face of the development of FinTech, do different types of commercial banks bear the same credit risk? With
the accelerated integration of finance and technology, studying the above issues will help clarify the role of FinTech development in
the credit risk of commercial banks, help prevent the occurrence of financial risks, and promote the deep integration of commercial
banks and FinTech.
The contribution of this paper may lie in: improving the construction method of Fintech index in the past, so that the index can
more comprehensively and reasonably measure the development level of individual FinTech of commercial banks; We can explore the
impact of the development of FinTech by commercial banks on their credit risk, and explore its mechanism from the perspective of
digital risk control; Exploring the impact of FinTech on credit risk of different types of commercial banks has guiding significance for
commercial banks to use FinTech to control credit risk according to their own conditions.

* Corresponding author.
E-mail address: [email protected] (S. Ye).

https://doi.org/10.1016/j.frl.2023.103857
Received 28 February 2023; Received in revised form 29 March 2023; Accepted 4 April 2023
Available online 5 April 2023
1544-6123/© 2023 Elsevier Inc. All rights reserved.
Y. Zhang et al. Finance Research Letters 55 (2023) 103857

2. Literature review and research hypothesis

FinTech refers to emerging financial products, financial services and financial models with emerging technology attributes that can
have a profound impact on traditional financial services and traditional financial markets (FSB, 2016). FinTech has great potential.
FinTech has great potential, through which a wider range of financial services can be provided (Lagna and Ravishankar, 2021), while
also having an impact on commercial banks.
On the one hand, the development of FinTech of commercial banks may increase credit risk. Philippon (2016), Lee and Shin (2018)
have reservations about the rapid development of FinTech, and believe that the use of FinTech will bring hidden worries and gather
financial risks. The development of FinTech has led to a decline in the lending rate and net interest margin, changed the structure of the
bank’s liability side, and increased the bank’s asset-side risk appetite (Chen et al., 2022). Wang et al. (2020) believes that FinTech and
competition promote the adjustment of bank credit structure. In order to maintain stable or improve business performance, com­
mercial banks may adjust the standards of credit customer access and asset selection, leading to deterioration of asset quality and
increase of credit risk. Liao (2018) believes that FinTech has a positive impact on the loan loss reserve ratio, that is, the faster the
development of FinTech, the higher the loan loss reserve ratio and the greater the risk. Anagnostopoulos (2018) believes that FinTech
leads to technical risks in commercial banks, all-weather services and diversification of participants, and massive data are increasing in
power. Once a large amount of customer information data is not properly kept, it will lead to information and data leakage, various
types of information are complex, and the risk of technology runaway is increased. On the other hand, the application of FinTech in
commercial banks, especially in digital risk control, has reduced credit risk. While the development of FinTech has led to the expansion
of bank risk-taking behavior, it has optimized the bank risk-taking structure through financial efficiency, financial innovation and risk
management, which is conducive to the virtuous circle of finance and economy, and finally reduced the risk (Li et al., 2022). Li et al.
(2022) believes that FinTech brings new opportunities to traditional risk management, enables its transformation and upgrading, and
helps improve the efficiency of the financial industry. At the same time, a series of new technologies in the field of FinTech are
conducive to improving the coverage of risk management in the financial industry. The application of FinTech in commercial banks
can effectively help banks measure the credibility of customers, strengthen information sharing, and reduce the level of bank risk, in
order to improve the information asymmetry at the credit level of banks and enterprises, and reduce the risk bearing of commercial
banks(Hu et al., 2022; Marcelin et al., 2022; Banna et al., 2022).
From the perspective of credit risk control of commercial banks, under the "Tech+Fin" mode characterized by technology
empowerment, data collection, analysis and mining technology embedded in FinTech can help banks obtain multidimensional data
information and establish correct market expectations (Gambacorta et al., 2019). The core technologies such as big data, artificial
intelligence, cloud computing and blockchain that FinTech relies on have their own advantages in financial risk prevention and
control. By integrating multiple information systems of financial institutions, cloud computing can help financial institutions solve
massive heterogeneous information processing and provide diverse and complex applications, and achieve business innovation and
risk control (Wu et al., 2022). The use of big data technology can form effective credit warning and prevention (Du et al., 2021).
Blockchain technology can guarantee the authenticity and traceability of the information flow process, significantly improve the
financing efficiency and control the risk (Benoit et al., 2017; Chen et al., 2021).
From the perspective of the heterogeneity of banks, the main customers of large banks in the credit market are mainly large en­
terprises or state-owned enterprises, while small and micro enterprises are constrained by various loan conditions due to their financial
conditions and internal information opacity, forming a long tail market of credit. The flexible loan conditions of small and medium-
sized banks make it possible to lend to small and micro enterprises, whose main loan customers are small and micro enterprises(Zhang
et al., 2019). Due to information asymmetry and other factors, there are greater risks in the loan business. Large banks have perfect
credit organization system, prudent credit decision-making behavior and rich experience in credit risk management. There is relatively
little room for developing FinTech to improve credit risk.
Hypothesis 1. The development of FinTech by commercial banks can reduce bank credit risk, and the application of FinTech in
digital risk control plays an important role in reducing bank credit risk.

Hypothesis 2. The impact of the development of FinTech by commercial banks on bank credit risk is heterogeneous, and the in­
hibition effect of the development of Fintech by small and medium-sized banks on credit risk is greater.

3. Model construction

3.1. Data selection

This paper selects the annual sample data of 138 commercial banks in China from 2013 to 2021. The data comes from the Wind
database and CSMAR database. Some missing data are obtained by searching the annual reports of commercial banks.The sample
banks include six large state-owned commercial banks, 11 joint-stock commercial banks, 74 city commercial banks and 47 rural
commercial banks. Macroeconomic data are from the data released by the National Bureau of Statistics and the People’s Bank of China.

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Y. Zhang et al. Finance Research Letters 55 (2023) 103857

3.2. Variable definition

3.2.1. Variable selection

Explained variable: bank credit risk. The measurement indicators of bank risk mainly include weighted risk asset ratio, expected
default rate, stock price volatility, Z value, non-performing loan rate, etc. This paper focuses on the credit risk, selects the non-
performing loan ratio (RISKNPL) to measure the bank’s credit risk level, and further uses the non-performing loan provision
coverage ratio (RISKPCR) as the proxy variable for the robustness test.
Core explanatory variable: referring to the practice of Guo and Shen(2015),this paper uses Python web crawler, text mining method
and factor analysis to construct FinTech development index (FT) of commercial banks as the core explanatory variable. In order to
investigate the impact of different factors, this paper continues to construct the FinTech payment settlement Index (FTP), FinTech
capital raising index (FTD), FinTech investment management index (FTI), FinTech market facility index (FTM) and FinTech digital risk
control index (FTC).
Control variables: This paper controls bank characteristic variables such as bank asset size (SIZE), capital adequacy index (CAR),
liquidity level (LDR), profitability (ROE), operating capacity (TAT), and macroeconomic variables such as industry concentration
(CR5), inflation level (CPI) and monetary policy environment (M2R). Among them, the scale of bank assets is expressed by the log­
arithm of total asset size, the capital adequacy index is expressed by the bank’s capital adequacy ratio, and the liquidity level is
expressed by the bank’s deposit and loan ratio. The profitability is expressed by the bank’s return on net assets, the operating capacity
is expressed by the total asset turnover ratio, and the banking concentration is calculated by the proportion of the top five banks’ assets.
The inflation rate is expressed by the growth rate of consumer price index, and the monetary policy environment is expressed by M2
growth rate.

3.2.2. Construction of FinTech development index of commercial banks

First, determine the original thesaurus. According to the classification of FinTech activities by the Financial Stability Council and
the application of FinTech in commercial banks, this paper establishes the original lexicon as shown in Table 1 from five dimensions:
payment and settlement, capital raising, investment management, infrastructure, and digital risk control.
Second, calculate the keyword frequency of each bank by year and quantify the original thesaurus. We can match the keywords in
the original thesaurus with various commercial banks, use Python web crawler technology to search Baidu News by year, such as "Bank
of China+Digital Currency", filter out irrelevant links and duplicate news, and sort out the news search results of various banks in
2013–2021, totaling 352,597 data. The results of Baidu news are usually the practical activities or resources invested by the com­
mercial bank in the field of FinTech in the current year, which all represent the development degree of the commercial bank’s FinTech.
Third, with the help of factor analysis, we can construct the FinTech development index of each commercial bank by year.
First of all, KMO test and Bartlett test were performed on the six groups of keywords, and the results showed that KMO values were
all greater than 0.9, and the significance level of Bartlett test was less than 0.001.
Thirdly, common factors with eigenvalue greater than 1 are extracted based on principal component analysis, and factor scores are
calculated. The load matrix is orthogonal rotated according to the principle of maximum variance, and the score coefficient matrix of
the factor is estimated by regression analysis.
Finally, the common factor is expressed as a linear combination of the original variables with the factor score as the weight, the
original index is standardized with the method of maximum and minimum, and the data is standardized to 0–1, so as to obtain the
FinTech development index (FT) of each commercial bank in each year.
At the same time, factor analysis is conducted on the keywords of the five dimensions to measure the development level of the five
dimensions of FinTech of commercial banks, and the FinTech payment settlement index (FTP), FinTech capital raising index (FTD),
FinTech investment management index (FTI), FinTech market facility index (FTM) and FinTech digital risk control index (FTC) of each
commercial bank by year are obtained.

3.2.3. Descriptive statistics

See Table 2 for statistical results of variable design and description.

Table 1
Original thesaurus of commercial bank FinTech development index.
Dimension Keyword

Payment and Mobile wallet, digital currency, point-to-point remittance, third-party payment, mobile payment, online payment, online payment,
settlement mobile payment, mobile internet, digital payment, NFC payment
Capital raising Loan collection, online loan platform, credit scoring, credit investigation, crowdfunding, online financing, online loan, online
investment, smart contract, online approval, online credit
Investment Intelligent investment consulting, wealth management, online securities trading, online currency trading, online financial management,
management online financial management, online financial management, online insurance, online car insurance, and financial management platform
Infrastructure Digital identity authentication, multi-dimensional data, distributed accounting, machine learning, Internet of Things, blockchain,
biometrics, big data, cloud computing, 5 G, artificial intelligence
Digital risk control Digital risk control, intelligent risk control, prediction model, behavior modeling, scoring model, anti-fraud model, big data risk control,
risk control platform, risk portrait, customer access model, risk control model

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Table 2
Descriptive statistics.
Variable type Variable name Character Mean value Standard Minimum value Maximum value
deviation

Interpreted variable Non-performing loan ratio RISKNPL 1.603 0.843 0.030 12.250
Provision coverage ratio RISKPCR − 2.603 1.315 − 11.890 − 0.410
Core explanatory variables FinTech development index FT 0.079 0.098 0.000 0.704
FinTech payment settlement index FTP 0.080 0.110 0.000 1.000
FinTech capital raising Index FTD 0.079 0.092 0.000 0.627
FinTech investment management FTI 0.094 0.103 0.000 0.709
index
FinTech market facility index FTM 0.062 0.100 0.000 1.000
FinTech digital risk control index FTC 0.053 0.079 0.000 0.612
Control variable Bank asset size SIZE 26.060 1.656 22.940 31.190
Capital adequacy index CAR 13.546 2.145 2.370 33.350
Flow level LDR 70.102 13.071 25.390 138.080
Profitability ROE 12.464 5.059 0.400 33.280
Operating capacity TAT 0.023 0.008 0.000 0.070
Industry concentration CR5 0.545 0.020 0.524 0.588
Inflation level CPI 2.000 0.593 0.900 2.900
Monetary policy environment M2R 11.111 2.797 6.400 15.600

3.3. Model settings

3.3.1. Static panel model

To explore the impact of FinTech development level of commercial banks on credit risk, a static panel regression model is
established:
Riski,t = α0 + α1 Riski,t + α2 FTi,t + α3 Xi,t + μi + εi,t (1)

Table 3
Static panel estimation results (fixed effect model).
Model 1 Model 2 Model 3 Model 4 Model 5 Model 6

FT − 1.081***
(− 3.340)
FTP − 0.723*
(− 2.491)
FTD − 0.625*
(− 2.489)
FTI − 0.782*
(− 2.510)
FTM − 1.069**
(− 3.171)
FTC − 1.349***
(− 4.099)
LDR 0.007** 0.007** 0.007** 0.007** 0.007** 0.007**
(3.114) (2.821) (2.898) (2.910) (3.161) (3.186)
CAR − 0.081*** − 0.083*** − 0.082*** − 0.089*** − 0.080*** − 0.081***
(− 7.808) (− 8.098) (− 7.941) (− 8.038) (− 7.769) (− 7.957)
TAT 3.9300 3.721 3.586 3.823 3.672 4.271
(1.100) (1.039) (1.002) (1.067) (1.027) (1.197)
SIZE − 0.436*** − 0.451*** − 0.450*** − 0.452*** − 0.432*** − 0.412***
(− 4.069) (− 4.207) (− 4.196) (− 4.215) (− 4.022) (− 3.837)
ROE − 0.085*** − 0.085*** − 0.085*** − 0.085*** − 0.085*** − 0.085***
(− 14.505) (− 14.543) (− 14.567) (− 14.476) (− 14.487) (− 14.560)
CR5 − 3.873 − 2.904 − 2.735 − 3.173 − 3.015 − 4.772
(− 1.430) (− 1.083) (− 1.026) (− 1.172) (− 1.136) (− 1.751)
M2R − 0.025* − 0.028** − 0.029** − 0.029** − 0.028** − 0.019
(− 2.484) (− 2.813) (− 2.962) (− 2.958) (− 2.775) (− 1.909)
CPI 0.059* 0.055* 0.054* 0.055* 0.050 0.071**
(2.228) (2.071) (2.034) (2.069) (1.893) (2.631)
R2 0.2370 0.2336 0.234 0.234 0.236 0.241
N 1242 1242 1242 1242 1242 1242

Note: *, * * and * * * are significant at the statistical level of 10%, 5% and 1% respectively; The t statistic value corresponding to the estimator is shown
in brackets. The following table is the same.

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3.3.2. Dynamic panel model

The credit business of commercial banks is greatly affected by the previous period, resulting in the persistence of bank credit risk. In
order to effectively depict the continuous dynamic process of bank credit risk, a lag period of credit risk indicators is added to the
model (2), and the system GMM method is used to test. The specific model design is as follows:
Riski,t = β0 + β1 Riski,t− 1 + β2 FTi,t + β3 Xi,t + μi + εi,t (2)

Where, the lower subscript i represents the bank and t represents the year. Riski,t refers to bank credit risk, FTi,t refers to the devel­
opment level of FinTech of commercial banks, Xi,t refers to a series of control variables, μ is individual fixed effect; ε is a random error
item.

4. Empirical results and analysis

4.1. Benchmark inspection

4.1.1. Impact of FinTech development of commercial banks on credit risk

Firstly, the model is tested by Hausman, and the result rejects the null hypothesis that there is no fixed effect. This paper uses the
fixed effect model to analyze the impact of FinTech development of commercial banks on bank credit risk. Model 1 is the regression
model of FinTech development of commercial banks to credit risk, and model 2–6 is the regression model of five different dimensions
of FinTech index to credit risk. See Table 3 for specific results.
According to the regression results of model 1 in Table 3, the coefficient of the core explanatory variable, the FinTech development
index (FT) of commercial banks, is − 1.081, and has passed the significance test at the level of 1%, indicating that the bank credit risk
will be reduced by 1.081% for every 1% increase in the FinTech development index of commercial banks. This is consistent with the
above expectations and supports the judgment of commercial banks that the development of FinTech will reduce their credit risk.

4.1.2. The impact of different application dimensions of FinTech on credit risk

The empirical equation is regressed with the constructed FinTech payment settlement index (FTP), FinTech capital raising index
(FTD), FinTech investment management index (FTI), FinTech market facility index (FTM) and FinTech digital risk control index (FTC)
as the core explanatory variables. From the regression results of model 2–6 in Table 3, it can be seen that the five FinTech indexes of
different dimensions have a negative effect on credit risk, while the digital risk control has the strongest inhibition effect on credit risk,
with a coefficient of − 1.3486.
Driven by data and technology and oriented by customer demand, the digitalization of commercial banks promotes the
improvement of financial efficiency by innovating financial services and reshaping business processes. Digital risk control applies
cutting-edge financial technologies such as big data and machine learning to risk prevention and control related scenarios to improve
the efficiency and accuracy of risk control.In addition to acquiring a large number of customers at a low marginal cost, the digital risk
control system monitors the changes of credit risk in a real-time and all-round way to minimize the possibility of borrower default
(Huang and Qiu, 2021). What digital risk control brings to commercial banks is not only shallow changes in data application and
system construction, but also profound impact on risk management mode, in order to promote the transformation and upgrading of
commercial banks’ credit risk prevention and control, and reduce credit risk. At the same time, commercial banks should increase their
investment in financial technology market facilities based on the underlying technology of FinTech, which can achieve the trans­
formation and upgrading of credit business and risk control model and reduce credit risk through technological advantages.

Table 4
System GMM estimation results.
Model 7 Model8 Model 9 Model 10 Model 11 Model 12

L.Risk 0.539*** 0.580*** 0.539*** 0.542*** 0.564*** 0.480***

(7.704) (7.453) (7.215) (5.962) (8.161) (6.487)
FT − 0.577***
(− 3.785)
FTP − 0.346*
(− 2.392)
FTD − 0.372***
(− 3.412)
FTI − 0.595*
(− 2.121)
FTM − 0.540***
(− 3.436)
FTC − 0.880***
(− 4.312)
N 1104 1104 1104 1104 1104 1104
AR(2) 0.109 0.102 0.169 0.123 0.233 0.184
Sargan 0.147 0.121 0.121 0.121 0.111 0.411

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Y. Zhang et al. Finance Research Letters 55 (2023) 103857

4.2. Endogenous problem

4.2.1. System GMM

The lag term of the explained variable is introduced into the static model, a dynamic panel model is established, and the system
GMM is used to empirically analyze the impact of FinTech development of commercial banks on bank credit risk. The results are shown
in Table 4. The regression results show that the core explanatory variable FT coefficient is still significantly negative, and the
endogenous bias does not change the direction of the role of commercial banks’ development of FinTech on their credit risk in the
empirical results, indicating that the development of commercial banks’ FinTech can reduce their non-performing loan rate and inhibit
the bank’s credit risk. The coefficient of digital risk control index is − 0.880, indicating that the application of FinTech in digital risk
control plays an important role in reducing credit risk. In addition, the coefficients of the first-order lag term L. Risk of the explained
variable in Model 7–12 are significantly positive at the level of 1%, indicating that the credit risk of commercial banks in the previous
period has a positive lag effect on the current credit risk.

4.2.2. Instrumental variable method

Considering that the bank’s credit risk will not affect its previous level of development of FinTech, the development level of FinTech
with a lag of one period is used as a tool variable, and the static panel model is used for estimation. From the test results (Table 5), the
coefficient before the L.FT of the FinTech development level lagging behind the first period is still negative, and the absolute value of
the L.FTC coefficient of the digital risk control index lagging behind the first period is still the largest. Therefore, after using the
instrumental variable method to alleviate the endogenous problem of the model, the benchmark regression results are still stable,
further verifying hypothesis 1.

4.2.3. Robustness test

The bank’s negative non-performing loan provision coverage ratio (RISKPCR) is used as the explained variable, and the results are
shown in Table 6.The empirical results show that the negative correlation between the development of FinTech and bank credit risk of
commercial banks is still stable after replacing the explanatory variables for regression, and the application of FinTech in digital risk
control plays an important role in it.

4.2.4. Further discussion

Considering the differences in the scale of commercial banks, FinTech development of different types of commercial banks has
certain differences, which will have an impact on the credit risk of commercial banks. In this paper, the total sample is sorted by the
annual average asset size. The first 17 banks are selected as large banks, and the last 121 banks are selected as small and medium-sized
banks. The regression analysis of the model is carried out again, and the results are shown in Table 7.
The two test results show that the FT coefficient of the development level of FinTech of the two types of banks is negative, and the
influence coefficient of large commercial banks is smaller than that of small and medium-sized commercial banks, indicating that the
development of FinTech has a positive effect on both types of commercial banks to mitigate credit risk, but compared with large
commercial banks, the development of FinTech has a greater impact on the credit risk of small and medium-sized commercial banks.
This result also confirmed the heterogeneity of the impact of commercial banks’ development of FinTech on their credit risk. Small and
medium-sized commercial banks can enhance the level of digital risk control through the development of FinTech, obtain more in­
formation, tap more long-tail customers, and mitigate credit risk. The results confirm hypothesis 2.

5. Conclusions and suggestions

The research results show that: first, the development of FinTech by commercial banks can effectively alleviate the overall credit
risk of banks. Second, the application of FinTech in different dimensions has played different roles in reducing bank credit risk, among

Table 5
Estimation results of instrumental variable method.
Model 13 Model 14 Model 15 Model 16 Model 17 Model 18

L.FT − 0.864*
(− 2.172)
L.FTP − 0.937
(− 1.617)
L.FTD − 0.420*
(− 1.596)
L.FTI − 0.558*
(− 1.156)
L.FTM − 0.867*
(− 2.262)
L.FTC − 1.757**
(− 2.965)
N 1104 1104 1104 1104 1104 1104
R2 0.638 0.636 0.637 0.637 0.638 0.638

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Table 6
Robustness test results.
Model 19 Model 20 Model 21 Model 22 Model 23 Model 24

FT − 3.139***
(− 5.708)
FTP − 2.144***
(− 4.328)
FTD − 2.028***
(− 4.741)
FTI − 2.553***
(− 4.812)
FTM − 2.886***
(− 5.027)
FTC − 3.457***
(− 6.183)
N 1242 1242 1242 1242 1242 1242
R2 0.187 0.177 0.180 0.181 0.182 0.191

Table 7
Heterogeneity test results.
Big banks Big banks Small and medium-sized banks Small and medium-sized banks
(fixed effect) (system GMM) (fixed effect) (system GMM)

L.Risk 0.804*** 0.554***

(5.613) (7.326)
FT − 0.580* − 0.111** − 1.780*** − 0.458*
(− 2.204) (− 3.231) (− 3.652) (− 2.236)
N 136 968
R2 153 1089
AR(2) 0.688 0.817 0.231 0.121
Sargan 0.144 0.286

which the application in digital risk control has played an important role. Third, the impact of the development of FinTech by
commercial banks on credit risk is heterogeneous. Compared with large banks, the development of FinTech by small and medium-sized
banks has a greater role in mitigating credit risk.
The policy implications of the above conclusions are reflected in the following aspects. First, we should encourage commercial
banks to explore and develop FinTech. Commercial banks need to increase capital and human investment in FinTech, especially in
research and development of digital risk control, reduce the cost of information asymmetry, and strengthen data mining and analysis,
in order to improve the accuracy of customer risk assessment, improve their credit risk management and control level, and realize the
deep integration of commercial banks and FinTech. Second, small and medium-sized banks should seize the opportunities brought by
the development of FinTech, absorb and utilize the achievements brought by the development of FinTech and actively implement the
digital transformation strategy. Third, we should strengthen the supervision of the development of FinTech by commercial banks.
While enabling commercial banks to reduce credit risk, the development of FinTech by commercial banks may also bring new risks.
Relevant regulatory authorities should improve the FinTech regulatory system, monitor the changes brought by the development of
FinTech by commercial banks, and prevent the risks brought by the development of FinTech.

Declaration of Competing Interest

The authors declare that they have no known competing financial interests or personal relationships that could have appeared to
influence the work reported in this paper.

Data availability

The authors do not have permission to share data.

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