How valuable is FinTech adoption for traditional banks?

This study examines the effect of FinTech adoption on traditional banks. We employ machine learning and textual analysis to count the number of mentions of FinTech-related terms in annual reports, and collect the number of FinTech-related patent applications. Based on a sample of 181 Chinese commercial banks, the results indicate that FinTech adoption has a positive and significant effect on bank performance. The 'FinTech adoption effect' appear to be heterogeneous among technology categories and is more pronounced in banks with more tech managers. Last, we examine the impacts of FinTech adoption on bank risk, business transformation and banks' market share.