FinTech and Commercial Bank Risk-Taking: Evidence from the Operational Efficiency Channel

Against the backdrop of rapid digital transformation in banking, how fintech affects commercial banks' risk-taking has become an important issue for financial stability. This study uses annual data for Chinese listed commercial banks over 2010–2024 to investigate whether differences in fintech development are associated with banks' risk exposure.Banks with higher fintech development tend to report a larger share of risk-weighted assets. The positive relationship remains statistically significant in the fixed-effects specification. The mechanism analysis further shows that fintech is associated with a lower cost-to-income ratio. When the cost-to-income ratio is introduced into the risk-taking equation, its coefficient is negative and significant, while the fintech coefficient remains positive. Similar results are obtained when the aggregate fintech index is replaced by separate measures of artificial intelligence and digitalization. The evidence therefore points to a possible trade-off. Fintech is associated with greater operating efficiency, but the additional operating capacity may also be accompanied by expansion into assets with higher risk weights. By using bank-level fintech data, the study adds evidence on how digital adoption is related to the risk profile of individual banks.