Bìznes Inform (Dec 2021)
The Fintech Risks Management of the Banking Sector
Abstract
The article is aimed at researching the impact and directions of fintech risk management in the banking sector. The article identifies key tendencies in the development of fintech innovations for the banking sector and explores the potential impact of their implementation on banks. According to the results of the analysis, fintech risks are systematized and the essence of each of them is disclosed. It is defined that an efficient direction for improving the efficiency of fintech risk management is to establish cooperation between banks and fintech companies. The study of foreign and domestic practice allowed to distinguish four main areas of partnership with: 1) fintech companies operating outside the banking sector; 2) fintech companies offering fintech solutions for banks; 3) fintech companies supplying destructive technologies; 4) fintech companies relying on current bank offers. The main channels of fintech risk transmission to the banking sector are identified. It is determined that the consequences of the implementation of fintech risks are manifested through the following traditional banking risks: operational, compliance, strategic, reputational. It is proved that in most cases, the events of fintech risk implementation on different business lines will be classified as consequences of operational risk. It is determined that the management of fintech risks in the banking business should be based on generally accepted approaches to risk management, taking into account the business model of a credit institution. It is determined that minimization of the impact of fintech risks is facilitated by the regulation of cooperation with fintech companies on the implementation of fintech innovations (development of strategies, policies, procedures, methods). The prospect of further research in this direction is the development of models for quantitative assessment of fintech risks. A significant positive impact on the efficiency of risk management of banks will be the development of methodological recommendations for stress testing, taking into account fintech risks. In the future, there is a need to develop appropriate models for the impact of fintech risks on the balance sheet of banks and adequate stress scenarios.
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