The Impact of Internet Finance on China’s Banking Industry–Evidence from Internet Funds Sales and Third-Party Payment

Abstract

With the popularity of the Internet, more and more industries begin to combine their business with the Internet, and the financial industry is one of them. The new financial model generated by the combination of the two is Internet finance. The emergence of Internet finance has brought revolutionary changes to traditional financial service models and provide some new types of financial services, such as third-party payment and Internet fund sales. For third-party payment, third-party institutions with credit guarantee provide customers with payment and other services. Internet fund sales can aim to achieve direct connection between investment customers and third-party fund institutions, without the involvement of banks. Therefore, as traditional financial service providers, banks will face great challenges and need to re-evaluate their competitiveness. Therefore, this research will discuss the challenges brought by Internet finance to China's banking industry, which will be specifically reflected in the profitability of China's banking industry.