The FinTech revolution: Quantifying earnings uncertainty and credit risk in competitive business environments with disruptive technologies

Jorge R. Sobehart
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Jorge R. Sobehart: Credit and Operational Risk Analytics, Citi Franchise Risk Architecture, USA

Journal of Risk Management in Financial Institutions, 2016, vol. 9, issue 2, 163-174

Abstract: Here we quantify the risks associated with the release and adoption of competitive products and services, and their impact on revenue generation and the value of the firm. Our model can be used for assessing the risks of business strategies whose revenues are used for the repayment of specific obligations, and for estimating the probability of default on those obligations under different normal and stress scenarios. Our approach also provides a simple framework for estimating synergies between firms in competitive environments with disruptive technologies such as FinTech versus traditional banking.

Keywords: competitive environments; earnings uncertainty; credit risk; disruptive technologies; FinTech (search for similar items in EconPapers)
JEL-codes: E5 G2 (search for similar items in EconPapers)
Date: 2016
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Persistent link: https://EconPapers.repec.org/RePEc:aza:rmfi00:y:2016:v:9:i:2:p:163-174

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