TITLE:
Can Adoption of Financial Technology Change Corporate Client Structure in Chinese Banking?
AUTHORS:
Yue Hu, Lei Yin
KEYWORDS:
Financial Technology (FinTech), Client Structure, Default Risk, Chinese Banking
JOURNAL NAME:
Journal of Financial Risk Management,
Vol.13 No.1,
March
25,
2024
ABSTRACT: While the effect of Financial Technology on banking risk management
attracts public and researcher’s attention, how the basic element beneath
credit risk, namely client structure, will change with the adoption of
technology remains uncovered. This paper intends to figure out whether the
adoption of financial technology exerts effect on client structure. Beginning
with literature review, we propose related hypotheses on our research question.
Applying Fixed-Effect Model, this paper investigates the effect of FinTech on
client structure. Estimations show that the adoption of FinTech can improve
client structure indeed. Specifically, the proportion of client with nearly no
default risk rises while the proportion of default client declines. Then the
influencing conduits are examined via Mediating Effect Model. Empirical results
demonstrate that FinTech plays this positive role mainly through alleviating
information asymmetry.