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Madjleis Taklimi, Zahra (2024) Examining the Impact of FinTech on Banks’ Consumer Lending, Credit Risk, and Financial Performance: The case of the United States and China. PhD thesis, University of Nottingham.

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Abstract

In light of the inherent limitations of traditional banks’ consumer lending models and the distinctive advantages observed in FinTech and BigTech lenders, coupled with their remarkable growth trajectories, it comes as no surprise that industry experts and researchers widely regard the FinTech phenomenon as a disruptive innovation for the banking sector. While the prevailing sentiment in the literature tends to cast FinTech as a formidable threat to traditional banks, it is essential to recognize that, if harnessed effectively, FinTech, as a cutting-edge technology, holds the potential to enhance banks’ consumer lending capabilities, elevate financial performance, and diminish credit risk.

This PhD thesis aims to explore the dual dimensions of threat and opportunity posed by Financial Technology. It addresses the risky competition faced by fragile American banks against potent rivals like FinTech and BigTech lenders. Additionally, it examines the dichotomy of the Chinese banking sector, where government-owned banks face competition from FinTech credit providers while also being encouraged to integrate technology. This necessitates a thorough examination, both externally and internally, of FinTech's impact on traditional banks' lending activities in both the U.S.A and China.

While both the U.S.A and China host the world's largest banks and have witnessed significant growth in FinTech and BigTech lending, this empirical study reveals distinct impacts of FinTech on their respective banking sectors. In the U.S.A, FinTech lenders are overtaking traditional banks' consumer lending market and BigTech lenders have a negative impact on the financial performance of American banks. Conversely, in China, FinTech lenders do not have adverse effects, and BigTech lenders contribute positively to bank lending activities.

The study also finds that the FinTech-Adoption strategy positively influences consumer lending and financial performance while mitigating credit risk for both American and Chinese banks. However, FinTech-Adoption does not moderate the adverse impact of FinTech and BigTech lenders on overall lending activities in the U.S.A, highlighting the disruptive influence of FinTech credit providers. Regulatory differences between the two countries contribute significantly to this divergence in the FinTech and banking nexus.

In essence, the findings of this study highlight that neither American regulators nor Chinese regulators have provided an equal playing field in the credit market. Both of these approaches, if continued, may lead to monopolization of one party: FinTech credit providers in the U.S.A; and banks in China. Therefore, it is crucial for regulators in each country to closely monitor and foster the level of competition in the credit market, ensuring it remains regulated and balanced, as this approach ultimately contributes to the stability of the financial system.

Item Type:	Thesis (University of Nottingham only) (PhD)
Supervisors:	Moe Chit, Myint Kin Boon, Tang Ramachandran, JAYALAKSHMY Judge, Amrit
Keywords:	Financial Technology, Bank Consumer Lending, Credit Risk, Finacial Performance, USA, China
Subjects:	H Social sciences > HG Finance
Faculties/Schools:	UK Campuses > Faculty of Social Sciences, Law and Education > Nottingham University Business School
Related URLs:	URL URL Type UNSPECIFIED Author
Item ID:	78592
Depositing User:	Madjlesi Taklimi, Zahra
Date Deposited:	18 Aug 2025 08:18
Last Modified:	18 Aug 2025 08:22
URI:	https://eprints.nottingham.ac.uk/id/eprint/78592

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