Fintech Listed as Emerging Risk to Financial Stability in Report
(Bloomberg) -- For all its benefits, Fintech is cropping up as a concern because of its potential to disrupt financial stability.
That’s according to a new report from Depository Trust & Clearing Corp., which surveyed people in financial services to get their views on what the biggest risks are to economic security.
While developments in financial technology have ushered in greater access to banking, lowered investments fees and expanded access to banking and capital for larger swaths of the population, it starting to raise some concerns.
“Fintech risk, which was included in this survey for the first time, was acknowledged as a significant source of risk by 15 percent of respondents,” the authors wrote. “Generally recognized as holding great promise, these results demonstrate a growing awareness of potential emerging risks, highlighting the need to evaluate both risks and rewards associated with fintech initiatives.”
One area in particular that was mentioned was a lack of regulation, with respondents worrying that advancements have outpaced governance.
Still, more traditional dangers were of greater concern. Cyber risk topped the list at 76 percent, followed by geopolitical uncertainties at 69 percent and the impact of new regulations at 45 percent.
DTCC has conducted Systemic Risk Barometer Surveys across the global financial services industry on a semi-annual basis since 2013.
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