An illustration of the influential mechanisms (IMAGE)

Shanghai Jiao Tong University Journal Center

An illustration of the influential mechanisms

Caption

Digital transformation can indirectly decrease systemic risk by diversifying income structure and reducing business similarity. Under the fierce competition in banking sector, the homogeneity in traditional credit business might lead to a great similarity in asset portfolio, resulting in systemic risk contagion. Banks leveraging digital technologies help to decrease the homogeneity in business models, thereby reducing systemic linkage based on the asset price channel (Uddin et al., 2023). Moreover, digital transformation enhances real-time information sharing and interbank collaboration, thereby mitigating systemic risks (Tian and Su, 2024).

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Min Huang (Guangzhou University, China) Hai Jiang (Jinan University, China) Ziyi Zhu (Guangzhou Huashang College, China) Chao Chen (China Tobacco Guangdong Industrial Co Ltd, China)

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