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The development of digitalization has become a key factor affecting organizational performance because it provides new opportunities for value creation (Matt et al., 2015). Since the introduction of automated teller machines (ATMs) into the financial industry, extensive digital research on the financial sector has focused on academic discussion (Zavolokina et al., 2016). The new concept of digital technology is bringing creative destruction to the financial industry, whose core is manipulating and transmitting digital information (Clarke, 2019). The global spread of information technology (IT) has intensified the digital innovation of the financial industry. Recent research on the digitalization of the financial industry regards the combination of artificial intelligence, blockchain, cloud computing, big data technology, and the financial industry as “financial technology (fintech),” which is considered the most disruptive component in the process of financial digitalization (Gomber et al., 2017). Fintech broadly describes the modern connection between mature business activities in the financial services industry (e.g., transaction banking, money lending) and internet-related technologies (e.g., mobile internet, cloud computing) (Puschmann, 2017). Fintech’s disruption is reflected in more and more mature technology companies, and fintech start-ups (collectively referred to as “fintech companies”) are involved in wholesale payment, retail finance, insurance, investment management, and other financial services. This challenges traditional financial service providers (Abdou, & Jasimuddin, 2020; An & Rau, 2021; Gomber et al., 2017; Lee, 2015; Omigie et al., 2020; Panos & Wilson, 2020; Peng et al., 2020; Rahman et al., 2020; Zavolokina et al., 2016). Although the discussion about the digitalization of the financial industry has a long history, research on the effect of fintech on the financial industry lacks sufficient discussion (Phan et al., 2020; Wang et al., 2020).
Banks, as a traditional financial intermediary, are an essential part of the finance industry by allocating scarce financial resources (Bos & Kool, 2006). Existing literature has begun to study the effect of the development of fintech on banks, but there is no consensus on whether the two are “foes” or “friends.” Some studies suggest that the development of fintech has increased competition in the financial industry, which may reduce bank performance. First, fintech start-ups can meet the diverse financial needs of their customers more efficiently and conveniently (Mazana et al., 2016). Second, fintech subsidiaries derived from internet giants can develop richer financial service solutions based on existing technology foundations and platform application scenarios, which further intensifies the competition faced by the banking industry (Temelkov, 2018). Third, mature IT companies gradually become involved in financial services and rely on a solid technology base to respond flexibly to the development of fintech (Bollaert et al., 2021). In addition, some studies have discussed the role of banking industry participation in fintech development to promote performance. First, banks provide customers with more cost-effective and faster transaction processing by leveraging fintech to shape digital products and optimize operational processes (Lee et al., 2021). Second, banks can use big data to detect fraud and enhance network security to improve the risk management of online banking (Gai et al., 2018). In short, the development of fintech is a double-edged sword for bank performance. While fintech companies are subverting traditional financial services through their efficiency and differentiation advantages, the evolution of new technologies such as artificial intelligence, big data, and cloud computing is also forcing the banking industry to face this “brave new digital world” (Kerényi & Müller, 2019). Further research is needed to explore whether and how the development of fintech affects bank performance.