Traditional Banks’ Response Strategies and Digital Transformation Amidst the Impact of Fintech

Abstract

This study focuses on the impact of fintech on the Chinese traditional banking sector and its strategy, systematically analyzing multidimensional challenges such as revenue declines and weakened customer relationships. Through comparative case studies of Industrial and Commercial Bank of China and China Merchants Bank, coupled with empirical regression analysis of financial data from 14 commercial banks between 2019 and 2024, research reveals a weak positive correlation between the digital investment and bank profitability (measured by ROE). Findings indicate that fintech serves not only as a challenger but also as a crucial driver of transformation for traditional banks. The study further proposes that banks should implement differentiated strategies, enhance technological investments, optimize talent and organizational structures, and expand service scenarios through ecosystem partnerships to achieve competitive repositioning and sustainable development. This paper not only enriches the quantitative analysis of digital investment and the development status of the banking industry, but also provides practical guidance for the digital transformation of traditional banks.