A Research on the Impact of Market Structure on Deposit and Loan Pricing Using Financial Technology Innovation Pricing Model

Abstract

The pricing of commercial bank deposits and loans is a key link in optimizing the allocation of credit resources through the price mechanism by means of indirect financing. Under the background of the rapid development of financial technology, the mechanism of commercial bank deposit and loan pricing becomes much more complicated. On the one hand, the changes in the market structure and competitive landscape of China’s banking industry are bound to change the pricing behavior of commercial banks. On the other hand, financial technology innovation will have a significant impact on deposit and loan pricing at both the micro and meso industry levels. On the basis of theoretical analysis, this paper constructs a financial technology innovation pricing model and conducts empirical research. It is found that not only is there a significant direct correlation between market structure and financial technology innovation with the pricing of commercial bank deposits and loans, but the market structure pathway is also a key indirect mechanism affecting the pricing of commercial bank deposits and loans. Variables such as financial technology innovation, risk-taking, equity capital, benchmark interest rates, and actual output all have indirect effects on the pricing ability of commercial bank deposits and loans through the market structure pathway. This provides evidence support and feasible suggestions for further optimizing the market structure, promoting financial technology innovation, and improving the efficiency of deposit and loan pricing in China’s commercial banking industry.