<p>This study investigates the impact of FinTech on bank capital adequacy, by analyzing yearly financial indicators of 25 Chinese commercial banks from 2012 to 2021. Using the Pekin Digital Inclusive Finance Index, this study examines the influence of FinTech development on the banking industry by providing theoretical support and practical guidance to understand the mechanisms through which FinTech affects bank capital adequacy in China. Main findings suggests that FinTech initially reduces the capital adequacy ratio (CAR) because of higher marginal costs/risks as compared to benefits/returns. However, as firms increase investments in FinTech, their marginal benefits surpass the costs. In this way, we pay close attention to the interplay between FinTech and banking operations to help comprehend the current trends in the finance industry. Finally, in line with China's financial structure which is predominantly led by commercial banks, this paper proposes a series of practical policy recommendations to promote high-quality financial services and enhance competition. These policy recommendations are designed to address the challenges posed by FinTech and drive the banking industry to confront the financial challenges of the new era, ultimately achieving sustainable development.</p>