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

Paper: SSRN 3478640

Abstract

Over the past decade a long-term process of digitization of finance has increasingly combined with datafication and new technologies including cloud computing,

Complexity vs Empirical Score

• Math Complexity: 1.0/10
• Empirical Rigor: 0.5/10
• Quadrant: Philosophers — conceptual discussion, limited math and data

Why this score: The paper is a legal and policy analysis discussing risks in FinTech, with no mathematical models, formulas, or quantitative empirical data presented. It focuses on regulatory frameworks and conceptual risk definitions rather than backtesting or data-driven implementation.

Research Flowchart

  flowchart TD
  A["Research Goal<br>How does digital financial transformation<br>create new TechRisk?"] --> B["Methodology"]
  B --> C["Data Sources<br>FinTech case studies<br>Regulatory reports<br>Financial digitization data"]
  C --> D["Analysis Process<br>NLP & Thematic Analysis<br>to identify risk patterns"]
  D --> E{"Computation<br>Cluster risks by<br>digitization & datafication"}
  E -->|Cluster 1| F["Cloud Computing Risks<br>Data sovereignty & outages"]
  E -->|Cluster 2| G["FinTech Risks<br>Cybersecurity & algorithmic bias"]
  F & G --> H["Key Findings<br>Rise of 'TechRisk':<br>Systemic, non-financial threats<br>requiring new regulation"]