Abstract: Regarding the research on how the digital transformation of commercial banks affects their risk-taking level, existing literature mostly focuses on the technological changes and credit model adjustments in the credit market under digital scenarios, ignoring the impact of the bank financing market. In contrast, this article uses urban clustering of commercial banks and the regional digital inclusive finance index as a proxy variable for the degree of digital transformation of regional commercial banks. Using panel data from urban commercial banks from 2012 to 2022, this article analyzes the impact and mechanism of digital transformation of commercial banks on risk taking from the dimensions of "financing" and "lending". The empirical conclusion shows that the digital transformation of commercial banks has significantly increased their risk-taking level, manifested as a joint increase in credit risk (non-performing loan ratio) and operational stability risk (income volatility). Mechanism analysis shows that the risk accumulation of digital transformation is achieved through cost shock effects, while the credit selection effect is not significant, which indicates that the risk accumulation formed by commercial banks' digital transformation actually originates from "financing" rather than "lending". Commercial banks lack the ability to release debt cost pressure through credit premiums, leading to an increase in debt costs and ultimately resulting in risk accumulation. This conclusion can provide insights for commercial banks to more accurately select business entry points for risk control and management.

Key words: digital transformation, risk taking, cost shock effect, credit selection effect