COVID-19, the Growth of Fintech, and the Rise of Risk Management Challenges

Imad A. Moosa

Chapter 1 in Corporate Risk Management after the COVID-19 Crisis, 2023, pp 1-33 from World Scientific Publishing Co. Pte. Ltd.

Abstract: The COVID-19 pandemic has had both positive and negative effects on the fintech industry. The negative effects can be seen in terms of increasing incidence of contractual disputes with customers, failure to meet payments, defaults, and delayed repayments. The positive effects can be seen through growth in the number and value of fintech transactions and the influx of new customers as the non-pharmaceutical interventions intended to stem the spread of the virus enhanced the tendency to use digital financial services. The effects of the pandemic, both positive and negative, have risk management and regulatory implications. The negative effects have forced some fintechs to change their business models and take protective measures to face changing conditions. The massive growth of the fintech industry, bolstered by the positive effects, is likely to boost the incidence of corporate failure and aggravate the risks posed to financial stability and consumers. The rise of fintech makes the financial system more vulnerable to increasing frequency and severity of operational loss events through a rising incidence of fraud and system failure.

Keywords: COVID-19; Pandemic; Coronavirus; Small and Medium sized Business; SME; Risk Management; Keynesian Theory of Business Cycle; Social-Ecological Theory; Social Cognitive Theory; Nigeria; EU Artificial Intelligence Act; European Union; Artificial Intelligence; Labour relation; Fintech; Business Model; Economic Growth; Regulators; Policy Makers; Business; Corporate; Finance; AI; T-Shaped Teams; Al Janabi Model; Algorithms; Commodity; Crisis; Liquidity Risk; Internet of Things (IoT); Liquidity-Adjusted Value-at-Risk; Reinforcement Machine Learning; Optimization; Portfolio Management (search for similar items in EconPapers)
JEL-codes: G3 G32 (search for similar items in EconPapers)
Date: 2023
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