The Impact of Financial Technology on the Operational Efficiency of Traditional Commercial Banks

Abstract

This paper uses the annual report data of 16 traditional commercial banks from 2015 to 2019, uses DEA-Malmquist index method, selects fixed assets, number of employees and operating expenses as input variables, and selects net profit and deposit loan ratio as output variables to do an empirical research on the impact of financial technology on the operating efficiency of traditional commercial banks. The results show that: commercial banks generally adapt to the changes in the financial market brought by the rapid development of financial technology, and use financial technology to improve their operational efficiency; the operational efficiency of 16 commercial banks increased in last five years, but there are differences among them. Generally speaking, the performance of local banks is better than that of joint-stock banks, and the performance of joint-stock banks is better than that of state-owned commercial banks. The average operating efficiency of commercial banks in the past five years is relatively low, mainly due to the low efficiency of science and technology application and the slow efficiency of science and technology renewal. Based on the above empirical findings, this paper makes important recommendations for bank growth, policy support, and personnel training in the context of rapid financial technology development. This paper may provide some insight into China's banking industry's efficient growth.