With mobile transactions taking over the payment mode, cryptocurrencies being an aggressive investment market, and financial chatbots informing customers about new investment schemes, financial technology is progressing at an unprecedented scale. Fintech has become the center of financial innovations as it has changed the way finances are spent, earned, and managed in today’s world. However, financial technology is prone to risks that can be a hazard for the Fintech initiative. Luis Emilio Alvarez-Dionisi, in his article for ‘Isaca,’ shares how an organization can come up with a risk assessment model for Fintech.
Fintech Field of Work
The Fintech work sphere mainly comprises five aspects:
- Fintech start-ups deal with wealth management, capital market, crowdfunding, lending, and insurance enterprises.
- Technology developers who focus on cryptocurrency, cloud computing, data analytics, and media development.
- Financial consumers comprise enterprises and individuals.
- Traditional Financial Institutions that constitute banks and stock brokerage firms to name a few.
- Government, which regulates the finances and legislatures.
Management of Fintech Risks
Alvarez-Dionisi asserts four aspects to manage Fintech risks. Firstly, the organizations should analyze and manage Fintech risks to address the trouble it can cause to a company. Secondly, there should be a detailed Fintech risk assessment, where the organizations should conduct a clear identification of the Fintech risk areas. Thirdly, the companies should work on the Fintech risk reaction, where the identified risk is approached and responded to. Lastly, the organizations should focus on Fintech risk monitor and control, where it deals with the follow up of the Fintech risk for a company.
Components of Fintech Risk Assessment Model
Experts believe there are three elements required to conduct a Fintech risk assessment: identifying Fintech risk, performing qualitative risk checks, and then analyzing the quantitative risk of the Fintech.
Click here to read the full article: A Fintech Risk Assessment Model (isaca.org)