FinTech and Traditional Banking Performance in China

The impact of fintech on the performance of traditional banking remains contentious, with its underlying economic mechanisms still an urgent research priority. Utilizing panel data from 2010 to 2022, this study investigates the dynamic relationship between fintech development and traditional banking performance. The results demonstrate that emerging digital financial sectors, as early adopters of fintech, generate positive externalities on traditional banking performance through business model innovation. Conversely, traditional banks’ internal fintech adoption exhibits a U -shaped relationship with their performance. These findings comprehensively reveal the dynamic interplay between fintech and commercial banking evolution, offering critical insights for informing development strategies for digital finance.