Login / Register Submit Your Article
cover
Journal of Innovations in Economics & Management

Volume 5, 2024 - Issue 4

Submit Manuscript Journal Homepage
Latest Issue
Input keywords, title, abstract, author, affiliation etc..
Article Menu
Browse this journal
Vol. 6 (2025)
Vol. 5 (2024)
Vol. 4 (2023)
Vol. 3 (2022)
Vol. 2 (2021)
Vol. 1 (2020)
News more >>
5 February 2024 Scholarly Synergy Press Accelerates Global Academic Publishing Expansion with Three New Journals
15 January 2023 2023 The 2nd InternationalConference on Cyber Security, Artificial Intelligence and Digital Economy（CSAIDE 2023）
4 March 2021 Canadian Society for Engineering Management members can subscribe to EIT for only $100 per year!
Associated journals

Journal Article An open access journal
Journal Article

The Impact of Digital Transformation on Risk-Taking in Commercial Banks

by Yuzhou Liu 1,*
1
College of Economics and Management, China Agricultural University
*
Author to whom correspondence should be addressed.
JIEM  2024 5(4):89; https://doi.org/10.69610/j.jiem.20240903
Received: / Accepted: / Published Online: 3 September 2024
View Full-Text
Download PDF

Abstract

The digital transformation of commercial banks can enhance the efficiency of financial services, reduce operating costs, and strengthen the banks' competitiveness and stability in the market. With the continuous development of internet technology and artificial intelligence, the potential and scope for digital transformation in commercial banks are expanding significantly. This paper utilizes panel data from 43 Chinese commercial banks from 2011 to 2021 as the research sample and employs stepwise regression to empirically analyze the mechanisms through which digital transformation may affect the risk-taking levels of commercial banks. The study also examines the role of financial innovation in the relationship between digital transformation and risk-taking in commercial banks. The findings indicate that digital transformation significantly increases the risk-taking of Chinese commercial banks. Mechanism analysis reveals that digital transformation promotes financial innovation in commercial banks, which in turn mitigates the extent to which risk-taking levels increase. Heterogeneity analysis shows that the increase in risk-taking due to digital transformation is higher in state-owned and joint-stock commercial banks compared to urban and rural commercial banks. Based on these conclusions, the paper suggests that commercial banks should rapidly embrace digital transformation to reduce operational risks. Additionally, banks of different sizes and characteristics should identify digital transformation paths that align with their operational features and risk management capabilities. Finally, attention should be paid to the inherent risks of digital operations and the risk of low efficiency caused by excessively high input costs.

Keywords: Commercial banks; digital transformation; financial technology; risk-taking;
Copyright: © 2024 by Liu. This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY) (Creative Commons Attribution 4.0 International License). The use, distribution or reproduction in other forums is permitted, provided the original author(s) or licensor are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.

Share and Cite

ACS Style
Liu, Y. The Impact of Digital Transformation on Risk-Taking in Commercial Banks. Journal of Innovations in Economics & Management, 2024, 5, 89. doi:10.69610/j.jiem.20240903
AMA Style
Liu Y. The Impact of Digital Transformation on Risk-Taking in Commercial Banks. Journal of Innovations in Economics & Management; 2024, 5(4):89. doi:10.69610/j.jiem.20240903
Chicago/Turabian Style
Liu, Yuzhou 2024. "The Impact of Digital Transformation on Risk-Taking in Commercial Banks" Journal of Innovations in Economics & Management 5, no.4:89. doi:10.69610/j.jiem.20240903

Article Metrics

Article Access Statistics

References

  1. AGRAWAL A, GANS J,GOLDFARB A.Prediction machines:the simple economics of artificial intelligence[M] .Harvard: Harvard Business Press,2018
  2. Alkhatib A ,Harasheh M .Financial Performance of Palestinian Commercial Banks[J]. Social Science Electronic Publishing,2014,3(01):175-184.
  3. Ansoff H I. Strafegic Mnanagement[M].London:Macmillan,1979.
  4. Bharadwaj A S. A Resource based Perspective on Information Technology Capability and FirmPerformance: An Empirical Investigation[J].MIS Quarterly,2000,24(1).
  5. Bob Hinings, Thomas Gegenhuber, Royston Greenwood.Digitalinnovation and transformation:An institutional perspective[J].2018,28(1):52-61.
  6. Bynjolfsson E.The Productivity Paradox of Information Tech-nology[J]. Communications ofACM,1993,36(12):66－67.
  7. Zhai Shengbao, Cheng Yanting, Xie Lu. Digital transformation and risk-taking level of commercial banks [J]. Journal of Beijing Technology and Business University (Social Science Edition), 2023,38 (2): 75-86.
  8. Han Jie, Ren Shanshan. Research on digital Transformation of Rural Commercial Banks [J]. Credit investigation, 2023,41 (9): 86-92.
  9. He Li, Feng Ke, Liu Yufeng. The impact of the development level of fintech on the risk taking of commercial banks [J]. Southwest Finance, 2022 (8): 43-58.
  10. He Xiaogang, Luo Xin, Kuang Yaqin. Digital transformation and risk taking of commercial banks [J]. Enterprise Economy, 2023,42 (6): 121-132.
  11. Huang Yiping, Huang Zhuo. Digital Finance Development in China: Now and the Future [J]. Economics (Quarterly), 2018,17 (04): 1489-1502.
  12. Kim Huiyi. Research on the Digital Transformation and Development of Rural Commercial Banks [J]. Journal of Changchun Finance College, 2023 (6): 43-46.
  13. Liang Fang, Zhao Pu, and Huang Zhuo. Fintech, macroeconomic uncertainty and active risks of commercial banks [J]. Economics (Journal), 2022,22 (6): 1869-1890.
  14. Liu Gangling, Wang Chao. The impact of internal and external fintech development on the risk taking of commercial banks [J]. Chinas Collective Economy, 2023 (27): 106-109.
  15. Lu Min Feng. Risk types, characteristics and governance system of digital transformation of commercial banks [J]. Financial Development Research, 2023 (10): 63-68.
  16. Luo Yu, Cui Shuyan, Kuang Chun. Digitalization and business transformation of commercial banks ——— Based on the perspective of traditional business structure change [J]. International Finance Research, 2022 (5): 34-44.
  17. James Tien. Thoughts on the digital transformation of urban commercial Banks [J]. National Circulation economy, 2023 (5): 157-160.
  18. Tian Xiujuan, Li Rui. Digital technology enables the transformation and development of the real economy —— An analytical framework based on Schumpeters endogenous growth theory [J]. Managing World, 2022,38 (5): 16
  19. Xiong Jian, Chen Qiuyue, Dong Xiaolin. Will the cooperation with external fintech companies affect the risk taking of small and medium-sized banks?—— Empirical evidence from the City Commercial Bank [J]. Learning and Practice, 2022 (11): 54-64.
  20. Yan Weixiang, Gong Jinglei, Zhao Yu. Research on the impact of bank digital transformation on risk taking [J]. Journal of Tongling University, 2023,22 (04): 38-42 + 57.
  21. Zhang Zhengping, Liu Yunhua. The impact of digital financial development on the operation efficiency of rural commercial banks —— Empirical study based on non-balanced panel data from 2014 to 2018 [J]. Agricultural technology and economy, 2022 (4): 67-81.
  22. Zheng Zongjie, Ren Biyun. Fintech, government regulation and risk taking of commercial banks [J]. Scientific Decision-making, 2022 (2): 103-115.