Research on the Impact of Digital Finance on Bank Systemic Risk

With the rapid advancement of digital technologies, digital finance has become a crucial component of the global financial industry. This trend has profoundly changed the operational models and risk management frameworks of traditional banking. This paper aims to discuss the dual impact of digital finance on banking systemic risk by analyzing the rise of internet finance companies and the digital transformation of the banking industry. The research indicates that the impact of digital finance on banking systemic risk is twofold: on the one hand, the emergence of internet finance companies may exacerbate banks' risk exposure; on the other hand, the digital transformation of the banking industry can help banks reduce risk while improving efficiency. Based on these findings, this paper suggests that regulators need to strengthen the supervision of internet finance companies while continuously encouraging financial innovation, thereby improving the risk management framework to ensure the stability and security of the financial system. This research provides a new perspective for the in-depth understanding of the relationship between digital finance and banking systemic risk and provides theoretical support for relevant policymaking.