Risk Control: A Multi-Dimensional Review of Risk-Taking, Liquidity Creation, and Green Credit with ESG

Abstract

This paper explores the multi-dimensional impact of FinTech on commercial banks' risk control from the perspectives of risk-taking, liquidity creation, and green credit with ESG. Based on a review of existing literature and theoretical analysis, this study finds that FinTech exerts a dual effect on bank risk management. On the one hand, technologies such as big data and artificial intelligence improve risk identification efficiency, optimize liquidity allocation, and enhance green credit and ESG performance by alleviating information asymmetry between banks and borrowers. On the other hand, intensified market competition may induce excessive risk-taking, while technical integration barriers, data governance defects, and regulatory lag constrain the positive role of FinTech. The effects also exhibit significant heterogeneity across banks with different ownership structures, scales, and digital capabilities, with state-owned banks generally better positioned to leverage the advantages of FinTech than small private banks. The synergy between internal governance and external supervision is therefore critical for balancing FinTech innovation and risk control. This study enriches the theoretical framework linking FinTech and bank risk control and provides practical references for commercial banks to strengthen risk management and for regulators to formulate targeted policies that promote the healthy integration of FinTech and traditional banking.