The Dark Side of Digital Financial Transformation: The New Risks of FinTech and the Rise of TechRisk

Abstract

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A partial least squares approach to digital finance adoption

“…Digital finance could be a useful instrument for getting resources to the people who need them the most swiftly and efficiently (Arner et al 2020). Traditional crisis management objectives can now be achieved with greater potency and accuracy using digital financial technologies (Arner et al 2016).…”

“…Demonetisation in India in 2016 led to the acceleration of the adoption of digital payments due to the low circulation of cash in the economy (Frakman 2020). The penetration of digitization in the financial industry was further backed by the Covid-19 (Arner et al 2020). The 2008 crisis was a financial crisis, whereas the Covid-19 pandemic is a health crisis that impacts the financial sector and, therefore, the economy.…”

“…The 2008 crisis was a financial crisis, whereas the Covid-19 pandemic is a health crisis that impacts the financial sector and, therefore, the economy. Digital financial services, mainly digital wallets, can quickly and accurately send funds to those in need (Arner et al 2020). The covid-19 pandemic has brought attention to digital financial services due to the increasing pressure of social distancing (Agur et al 2020).…”

Financial geography II: The impacts of FinTech – Financial sector and centres, regulation and stability, inclusion and governance

“…Anonymity of crypto-assets, such as Bitcoin, untethers finance even further from the real economy than complex derivatives did (Omarova, 2019), which can fuel financial speculation on an unprecedented scale. Economies of scale, scope, and networks present in FinTech can lead to oligopolistic and monopolistic market structures, creating too-big-to-fail and too-interconnected-to-fail institutions (Buckley et al, 2019a;Magnuson, 2018). In tackling such issues, regulators influence relationships between incumbents and challengers (Zalan and Toufaily, 2017).…”

“…Having a global financial oversight, like that dreamed up by Haldane, necessitates more international cooperation. Buckley et al (2019a) call for a depoliticization of FinTech regulation and cybersecurity in particular. But as geographers have shown, finance is always political, and no amount of virtualizing and digitizing can change that (e.g.…”