Competition and Cooperation between Internet Finance and Traditional Banking: A Comparative Study Based on the Chinese Market

¹ Department of International Business, Yanshan College of Shandong University of Finance and Economics, 272000 Jining, China
² Russian，Shenzhen MSU-BIT University, 518100 Shenzhen, China
³ Michigan, Guizhou University of Finance and Economics, 550025 Guiyang, China
⁴ Management, Jinan University, 510000 Guangzhou, China

^* Corresponding author: AliZheng@stu2022.jnu.edu.cn

Abstract

The rapid development of Internet finance (ITFIN) in China has transformed the financial landscape, with Alipay and WeChat Pay dominating the third-party payment market while traditional banks are facing challenges of reforming. Studying the coopetition between the two is of great significance for optimizing the allocation of financial resources. The main focuses are: the competitive differences in core financial fields, whether technology integration can achieve complementary advantages, and the impact of the current environment, especially the regulatory framework, on the coopetition relationship through comparing the characteristics of ITFIN and traditional banks to study their competitive landscape; analysing cooperation cases in China and abroad to summarize various cooperation fields and conducting feasibility analysis on the possibility of continuous cooperation in the future. Ultimately, the competition between ITFIN and traditional banks reflects the trade-off between technological efficiency and financial stability as well as having their own advantages in payment, lending, and wealth management, achieving mutual development. Our study proposes some suggestions: for policy, use blockchain technology to balance liquidity; for enterprise, drive intelligent transformation through scenarios and upgrade compliance and risk management; for technology, promote the standardization and commercialization of open bank APIs.