Internetization of Banking, Regional Business Span and Development of Commercial Bank: Evidence from the Establishment of Direct Bank by City Commercial Bank

WANG Ke; ZHOU Ya-na; LUO Xuan

Volume 37 Issue 3

May 2022

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Article Navigation > Journal of Guangdong University of Finance & Economics > 2022 > 37(3): 49-65

WANG Ke, ZHOU Ya-na, LUO Xuan. Internetization of Banking, Regional Business Span and Development of Commercial Bank: Evidence from the Establishment of Direct Bank by City Commercial Bank[J]. Journal of Guangdong University of Finance & Economics, 2022, 37(3): 49-65.

Citation:

WANG Ke, ZHOU Ya-na, LUO Xuan. Internetization of Banking, Regional Business Span and Development of Commercial Bank: Evidence from the Establishment of Direct Bank by City Commercial Bank[J]. Journal of Guangdong University of Finance & Economics, 2022, 37(3): 49-65.

Citation:

WANG Ke, ZHOU Ya-na, LUO Xuan. Internetization of Banking, Regional Business Span and Development of Commercial Bank: Evidence from the Establishment of Direct Bank by City Commercial Bank[J]. Journal of Guangdong University of Finance & Economics, 2022, 37(3): 49-65.

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Internetization of Banking, Regional Business Span and Development of Commercial Bank: Evidence from the Establishment of Direct Bank by City Commercial Bank

1.
School of Finance, Guangdong University of Finance and Economics, Guangzhou 510320
2.
School of Business, Nankai University, Tianjin 300071
3.
Hunan University of Science and Technology, Xiangtan 411201, China

Received Date: 2021-10-28
Publish Date: 2022-05-28

Abstract

Abstract

Taking the establishment of direct bank in China's city commercial banks as an example, this paper tests the effect of internetization attempt of regional commercial banks, further analyzes the regional business span of banks, and discusses the combination of online and offline expansion of banks. The empirical results show that the establishment of direct banks will have a negative impact on the deposit absorption of city commercial banks, but increase the bank income. The former is mainly reflected in the banks with small regional business span, while the latter is mainly reflected in the banks with large regional business span. Further analysis shows that direct banks mainly play a role through the mobile terminal rather than the web platform. The above findings suggest that commercial banks can appropriately expand the market and tap the market potential through "offline expansion + online penetration" within the allowable regional scope. However, for banks with small regional business span, it is not suitable to blindly imitate national commercial banks to establish a homogeneous Internet platform.The government should further promote the in-depth development of digital finance and place the foothold of digital financial services at the level of enterprise technological innovation. The formulation of relevant policies should be based on local policies and enterprises.
- internetization of banking,
- regional business span,
- direct bank,
- commercial bank,
- bank performance,
- city commercial bank,
- internet finance

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References(43)

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