Search

The Impact of Digitalization on Risk Management of Financial Institutions

Author(s)

Zhipin Zhang, Dr. Julie Ann Abellera

Affiliation(s)

University of the Cordilleras, Gov. Pack Road, Baguio, Philippines

Abstract

With the rapid development of digital technologies, the financial industry is undergoing profound transformations. This research focuses on the impact of digitalization on the risk management of financial institutions, delving into how digital technologies reshape the ways of risk identification, assessment, response, and monitoring in financial institutions. Through theoretical analysis and empirical research, it is found that digitalization plays a crucial role in enhancing the efficiency of risk control and optimizing risk-making decisions. However, it also brings new risk challenges. Financial institutions should actively embrace digital transformation and establish a risk management system adaptable to the digital age to achieve sustainable development.

Keywords

Digitalization; Financial Institutions; Risk Management; Big Data; Artificial Intelligence

References

[1] Chen Yulu. The Development of Fintech and Regulatory Innovation [J]. China Finance, 2020(05):12-15. [2] Huang Yiping. The Innovation and Regulation of Digital Finance [J]. Tsinghua Financial Review, 2021(08):34-37. [3] Li Lin, Feng Junzheng, Jiang Zeshen. Blockchain Finance: Technological Transformation Reshaping the Future of Finance [M]. Beijing: CITIC Press, 2016. [4] Vasicek, O. A. (1977). An equilibrium characterization of the term structure. Journal of Financial Economics, 5(2), 177-188. [5] Chen, H., Chiang, R. H., & Storey, V. C. (2012). Business intelligence and analytics: From big data to big impact. MIS Quarterly, 36(4), 1165-1188. [6] Hong Yongmiao, Shi Yongdong, et al. Fintech and Financial Risk Management [J]. Economic Research Journal, 2020, 55(12): 4-23.