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The development history and current situation of Internet Finance in China and its impact on the performance of commercial banks,Development status of blockchain Finance

Time : 11/12/2021 Author : uj3kb1 Click : + -
        At present, China's Internet finance is in the stage of rapid development, and various Internet technologies and products emerge in endlessly. This paper focuses on Internet lending, Internet payment, Internet Finance and Internet financial technology,. This paper defines the meaning of commercial bank performance as: in a certain period of operation, commercial banks should not only consider the input-output relationship, but also consider the liquidity, security and sustainable development ability of commercial banks in the process of operation, fully and reasonably allocate their own economic resources, and focus on the goal of maximizing enterprise value, while providing financial products and services that meet market demand Overall evaluation of risk management level and operation efficiency.
 
        The concept of Internet finance was formally proposed in 2012. The development of Internet Finance in China can be roughly divided into three stages. The first stage, from the 1990s to the beginning of this century, is the initial integration of Internet and finance. At this stage, the Internet and finance began to integrate initially, and the advantages of the Internet began to show gradually. The financial industry began to study how to apply the Internet in practice, and the embryonic form of Internet finance was initially shown. The main feature of this stage is that the Internet industry is accelerated by the financial industry. The financial industry develops Internet technology and applies it to daily business.
 
        The online business processing of commercial banks has greatly improved the working efficiency of commercial banks while facilitating customers. The second stage, from the beginning of this century to 2012, is the initial development stage of the Internet finance industry. In this stage, Internet technology has made rapid progress, cloud computing, big data, mobile payment and other technologies have continuously emerged, and Internet enterprises have begun to be born. Consumers generally accept the third-party payment institutions represented by Alibaba. At the same time, the application of Internet technology by Internet finance companies has deepened the demand for Internet technology, thus promoting the progress of Internet technology. In 2007, paipai loan was established, marking the emergence of the online lending model.
 
        In 2011, the people's Bank of China began to issue third-party business licenses and made requirements for the standardization of third-party payment. The third stage, from 2012 to now, is a stage of rapid development of the Internet finance industry. In this stage, the Internet business model has sprung up like bamboo shoots after a spring rain, and has been gradually improved in the process of development. For example, Internet loans, third-party payments and crowdfunding have developed rapidly. Commercial banks have also made many changes and upgraded many traditional businesses. Therefore, the development of Internet finance has promoted the development of the entire financial industry to a certain extent. The third-party payment is mainly initiated by large-scale Internet enterprises, which have high reputation and strong performance ability among users. Although these enterprises are not financial institutions, they build a bridge between commercial banks and software users on the basis of the commercial bank cooperation agreement. In this way, they become a transit platform between commercial banks and users.
 
        The Internet payment method is convenient to use and easy to operate, which improves the transaction efficiency. Meet the daily needs of customers. In addition, Internet enterprises can use the accumulated customer data to understand the customer's consumption preference, and push the service according to the customer's preference, so as to improve the service efficiency and customer satisfaction. In terms of the development of third-party payment, China has made rapid progress. In 2019, non bank payment institutions had 13719.998 billion online payment businesses, up 35.69% and 20.10% respectively year-on-year. At present, the most typical domestic monetary funds are the small money link and wealth management link launched by wechat together with Huaxia and huitianfu funds, and the yu'ebao launched by Tianhong fund and Alipay.
 
        Compared with traditional money funds, Internet money funds are more convenient in terms of operation process and transfer in and transfer out. They do not need service fees, and support T + 0 transactions. The return rate of financial management is also significantly higher than the current deposit rate of commercial banks. The emergence of the new model of Internet Monetary Fund has a great impact on the traditional bank financial management. Yu'e Baocheng was established in 2013, and has reached the scale of 100 billion yuan in just half a year. Once yu'e Bao was launched, it had a great impact on the deposit business of other industries. Other Internet financial products include ant Jubao, zhaocaibao, JD finance, zhaocaibao, etc.
 
        Compared with the investment and financial management of traditional financial institutions, Internet investment and financial management has a higher rate of return and a shorter term, so it is more in line with the needs of consumers; In addition, the threshold of Internet financial management is mostly from 1 yuan, which gives small investors a chance to get financial benefits. However, the financial management threshold of commercial banks is very high. Before the emergence of Internet financial management, it was basically more than 1 million yuan. After the emergence of Internet financial management, most of them started to buy from tens of thousands of yuan, which excluded many small investors. Internet lending refers to a kind of lending method that accumulates a certain amount of funds through some methods and lends the owned funds to the fund demanders. After years of development, the scale of Internet credit in China has been constantly expanding, and the market supervision has been increasingly strict.
 
        The most important type of Internet credit is P2P lending platform. P2P network loan has many advantages and has attracted many customers. China's crowdfunding started late. After the first crowdfunding platform appeared at the time of roll call, various financing platforms began to appear. The highest number in 2016 was 532. Since 2017, with the strengthening of supervision, the number of crowdfunding platforms has begun to decrease. According to the data in June 2019, there are still 105 crowdfunding platforms still in normal operation. Currently, Internet technologies widely used include blockchain, big data and cloud computing. Based on the technical characteristics of blockchain, there are many possibilities for the establishment of financial infrastructure, so it is more widely and mature in the financial field.
 
        In addition, blockchain has also started extensive exploration in public services, government affairs, medical supply chain, public services and other fields. As a new technology, blockchain service to economic society should not be limited to a certain field. The integration of blockchain and various fields brings more possibilities for innovation. Internet enterprises first opened the era of big data application and extended it to other fields with their technical advantages. Due to the strong technical platform and massive data, Internet enterprises are in the leading position in the development of big data and have the first mover advantage in the application of big data. Taobao and tmall took the lead in launching their own data sharing platforms, which promoted the development of e-commerce, expanded their business areas on the basis of mastering a large amount of data, and included logistics and finance into their business scope.
 
        In 2013, Alibaba joined hands with logistics enterprises to launch the "Cainiao post station" service, transforming its data into real services. The development of cloud computing technology in China started with the establishment of cloud computing centers of domestic IT enterprises. So far, many cloud computing centers have been built. China's cloud computing market and technology are developing rapidly, but in terms of "cloud security", China is in the forefront of the world. After discovering the malicious programs and viruses in the Internet, the mesh client of cloud computing sends them to the server, and the professionals of the server conduct processing and analysis to find solutions and send them back to the mesh client of cloud computing, which can effectively prevent other clients from being attacked by similar malicious programs and viruses.
 
        At present, the status of Internet payment is supported and recognized by people. In order to systematize and standardize Internet payment, the state has also continuously issued policies, which has a certain impact on traditional commercial banks and broken the monopoly position of commercial banks in the field of payment and settlement. Nowadays, the process of financial disintermediation is accelerating, the reform of interest rate marketization is also advancing steadily, and intermediary business is more and more important to the performance of commercial banks. One of the important intermediary businesses of commercial banks is payment and settlement business, but it has been greatly affected by Internet payment. This will have a great impact on the performance of commercial banks. Compared with the payment and settlement methods of commercial banks, Internet payment is more convenient and less costly.
 
        The emergence of Internet finance is undoubtedly very positive to the financial market, which is conducive to the interests of consumers and the diversified development of China's financial market. However, the impact of Internet Finance on traditional commercial banks is also huge. The interest rate of Internet financial management is much higher than that of demand deposits of commercial banks, and it has the characteristics of being convenient, fast and available. This will lead to a significant reduction in the scale of demand deposits of commercial banks. On the other hand, for Internet financial products, the operating cost of funds is relatively low. Basically, they are sold and operated through the Internet, which has a certain cost advantage over commercial banks. The operation of commercial banks belongs to the high leverage operation mode. Most of the funds mainly depend on debt borrowing. The important guarantee for the operation and development of commercial banks is these debt funds.
 
        After long-term accumulation, commercial banks have won the trust of customers and formed a large volume and large capital scale. Commercial banks generally set the duration and relatively high capital threshold for financial products, and the capital cannot exit freely within the duration, which will make many funds that need liquidity unable to buy financial products of commercial banks. According to the long tail theory, a large number of small capital customers cannot reach the threshold of entering the business of financial products of commercial banks. For this part of small capital customers, network financing makes the funds with strong short-term liquidity demand and the funds with small scale at the end of the long tail have the opportunity to invest in financial products and obtain high returns.
 
        In addition, the diversified marketing system of Internet finance also makes Internet finance more popular, which will have a great impact on the performance of commercial banks. Internet lending is mainly divided into Internet lending and crowdfunding. Next, we will analyze the impact of Internet lending and crowdfunding on the performance of commercial banks. For online lending companies, financing and financing parties can independently decide on financing amount, financing period, interest rate, etc., which has the advantages of simple and flexible. However, due to the lack of market supervision on online lending, the risk of default is high. The online lending platform can only raise enough funds by raising the interest rate of financing. In order to attract investors to invest, the loan interest rate of the corresponding online lending platform must be very high to cover the financing cost, which will cause the loan interest rate of the online lending platform to be significantly higher than the loan interest rate of commercial banks, almost more than twice.
 
        Therefore, customers who have sufficient conditions to make loans from commercial banks generally do not choose to make loans from online lending platforms. The same is true for crowdfunding. Due to the asymmetry of information and high default risk, crowdfunding needs to attract deposits at high interest rates, and the financing cost is high. Therefore, customers who meet the loan conditions of commercial banks will not choose crowdfunding. To sum up, this paper believes that first of all, Internet payment will have a great impact on the intermediary business income of commercial banks, making the online payment business of commercial banks suffer a great impact, and the larger the proportion of intermediary business, the greater the impact of Internet payment. Secondly, the popularity of Internet payment will be higher and higher, which will inevitably have a greater impact on the business performance of commercial banks.
 
        Thirdly, on the one hand, Internet finance has impacted the intermediate business income of banks. On the other hand, Internet finance will seize part of the funds of commercial banks, raising the cost of obtaining funds for commercial banks. Finally, I think Internet lending will not have a significant impact on the performance of commercial banks.
 
        
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