Digital finance and sustainable development of commercial banks; insights from listed commercial banks

Abstract

With the rise of the digital economy, the ongoing integration of modern information technology with financial elements has significantly boosted the development of digital finance. This paper focuses on listed commercial banks in the A-share capital markets of Shanghai and Shenzhen, China, and empirically examines the impact of digital finance development on their sustainable development. The findings indicate that digital finance development substantially enhances the sustainable growth of these commercial banks. Further analysis reveals that this enhancement is achieved through two main mechanisms: improved business performance and better risk management. Moreover, the positive impact of digital finance on the sustainable development of commercial banks is more pronounced in regions with higher levels of marketization and among non-state-owned commercial banks.