Fintech, Bank Risk-Taking, and Risk-Warning for Commercial Banks in the Era of Digital Technology.

Fintech risks commercial banks in three ways, particularly operational efficiency, financial innovation, and risk management. Based on the data of 37 Chinese-listed commercial banks from 2011 to 2020, the study empirically analyzes the impact of fintech on bank risk-taking, and the intermediary effects of the three channels, such as operational efficiency, financial innovation, and risk management. The results show that fintech can effectively reduce the risk of banks. The results of heterogeneity analysis revealed that fintech strongly affects the risk-taking of state-owned banks but not obviously for rural commercial banks. Financial efficiency, financial innovation, and risk management indirectly affect the risk-taking of banks that contributed 8.51, 7.18, and 5.77%, respectively. We also constructed the commercial bank risk-warning index. Based on the quarterly data of banks from 2011 to 2020, we empirically tested the early warning effect of the bank risk-warning index. The results showed that when the signal month is set to 12 months, the bank risk-warning index can have a warning effect in this period.