Tail risk and systemic risk of finance and technology (FinTech) firms

Chaudhry, Sajid M.; Ahmed, Rizwan Raheem; Huynh, Toan Luu Duc; Benjasak, Chonlakan

doi:10.1016/j.techfore.2021.121191

Cited by 56 publications

(17 citation statements)

References 42 publications

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“…Second, the risk inherent in FinTech can be mitigated, and FinTech development can be promoted. As a technology‐driven financial innovation, FinTech is still all about finance; therefore it still carries the risks inherent in the traditional finance sector and cannot eliminate systemic risks (Chaudhry et al., 2022). At the same time, in contrast to financial innovations such as asset securitization, FinTech is a deeply financial innovation (Schindler, 2017) that carries a wider range of risks.…”

Section: Theoretical Analysismentioning

confidence: 99%

Can the digital economy promote FinTech development?

2021

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The deep integration of artificial intelligence (AI), blockchain, cloud computing, and big data into the economy and finance has given rise to the digital economy and financial technology (FinTech). The digital economy can promote high-quality economic development (Ning, 2020). On various occasions annually beginning from 2015, China's General Secretary Xi stressed the need for his country to develop a digital economy. Its development has been written into China's data security law (draft), drafted by the Standing Committee of the National People's Congress. It is anticipated that FinTech will reconstruct the pattern of global finance, which is expected to promote a worldwide rise in the tide of FinTech (Zhang & Chen, 2018). The People's Bank of

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Section: Theoretical Analysismentioning

confidence: 99%

Can the digital economy promote FinTech development?

2021

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“…Consequently, customer discontent will increase. This will result in the loss of customers for the fintech company (Chaudhry et al 2022 ). Consequently, fintech firms must prioritize technological investment (Coffie et al 2021 ).…”

Section: Literature For Risks In Fintech Lendingmentioning

confidence: 99%

“…Because of the security problem in this system, the fintech company’s reputation will suffer significantly. Fintech companies will have difficulty acquiring new customers because of this situation, which will increase their anxiety (Chaudhry et al 2022 ). Technology risk should also be considered in this framework (Liu et al 2022 ).…”

Section: Introductionmentioning

confidence: 99%

A hybrid decision support system with golden cut and bipolar q-ROFSs for evaluating the risk-based strategic priorities of fintech lending for clean energy projects

Wan

Miao

Wang³

et al. 2023

Financ Innov

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In the last decade, the risk evaluation and the investment decision are among the most prominent issues of efficient project management. Especially, the innovative financial sources could have some specific risk appetite due to the increasing return of investment. Hence, it is important to uncover the risk factors of fintech investments and investigate the possible impacts with an integrated approach to the strategic priorities of fintech lending. Accordingly, this study aims to analyze a unique risk set and the strategic priorities of fintech lending for clean energy projects. The most important contributions to the literature can be listed as to construct an impact-direction map of risk-based strategic priorities for fintech lending in clean energy projects and to measure the possible influences by using a hybrid decision making system with golden cut and bipolar q-rung orthopair fuzzy sets. The extension of multi stepwise weight assessment ratio analysis (M-SWARA) is applied for weighting the risk factors of fintech lending. The extension of elimination and choice translating reality (ELECTRE) is employed for constructing and ranking the risk-based strategic priorities for clean energy projects. In this process, data is obtained with the evaluation of three different decision makers. The main superiority of the proposed model by comparing with the previous models in the literature is that significant improvements are made to the classical SWARA method so that a new technique is created with the name of M-SWARA. Hence, the causality analysis between the criteria can also be performed in this proposed model. The findings demonstrate that security is the most critical risk factor for fintech lending system. Moreover, volume is found as the most critical risk-based strategy for fintech lending. In this context, fintech companies need to take some precautions to effectively manage the security risk. For this purpose, the main risks to information technologies need to be clearly identified. Next, control steps should be put for these risks to be managed properly. Furthermore, it has been determined that the most appropriate strategy to increase the success of the fintech lending system is to increase the number of financiers integrated into the system. Within this framework, the platform should be secure and profitable to persuade financiers.

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“…The development of fintech increases bank risk when the banking platform is affected by market risk [14]. There is strong evidence that fintech worsens risk taking and increases bank risk [15][16][17]. Although there have been many studies related to fintech and bank risk, the debate is still on whether fintech increases bank risk or fintech can reduce bank risk.…”

Section: P2p Lending Loansmentioning

confidence: 99%

The Effect of Fintech on Conventional Bank Performance and Bank Risk

Harmadi¹,

Untoro²,

Trinugroho³

et al. 2022

Advances in Economics, Business and Management Research

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Fintech in Indonesia is growing very rapidly, this is also very interesting for researchers. This study looks at the effect of Fintech on the performance and risk of conventional banks in Indonesia. The proxy for fintech in this study is P2P lending and the adoption of fintech technology by banks. The number of conventional banks in Indonesia is 107 banks, and this study took a sample of 81 conventional banks. This research period is for 5 years from 2017 to 2021. The results show that P2P lending and fintech adoption do not affect the performance or risk of conventional banks. However, what is interesting about the results of this study is that the interaction between each independent variable with the moderating variable of bank ownership structure shows the results of the influence of the independent variable on the dependent variable which is significant. We find that bank ownership structure is proven to strengthen the effect of P2P lending and fintech adoption on bank risk, while the effect on performance is not significant. We found that the presence of P2P lending will increase the risk of conventional banks. While the effect of fintech adoption shows a lowering effect on bank risk, especially those owned by cooperatives. Our findings support previous research results that the presence of P2P lending will increase bank risk, and the adoption of fintech will decrease risk.

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Tail risk and systemic risk of finance and technology (FinTech) firms

Cited by 56 publications

References 42 publications

Can the digital economy promote FinTech development?

Can the digital economy promote FinTech development?

A hybrid decision support system with golden cut and bipolar q-ROFSs for evaluating the risk-based strategic priorities of fintech lending for clean energy projects

The Effect of Fintech on Conventional Bank Performance and Bank Risk

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