Will Financial Technology Affects the Systematic Risks of Traditional Financial Institutions? An Empirical Evidence from Listed Financial Companies in China

This paper constructs a theoretical framework for the impact of financial technology on the systematic risk of traditional financial institutions from five perspectives: the correlation effect, technical effect, transmission effect, competition effect, and the regulatory lag effect. Based on the framework constructed, we selected data from 36 listed financial institutions in China to investigate the relationship between financial technology and traditional financial institutions' systematic risk. The results we obtained were: 1) financial technology has an inverted-U relationship with the systematic risk of traditional financial institutions; 2) currently, China's traditional financial institutions are still in the left half of the inverted-U curve, and the development of financial technology is promoting the accumulation of systematic financial risks, and 3) the larger the size of traditional financial institutions, the smaller the impact of financial technology on systematic risk, and the more lagging the impact is