Three Technology Risks Threatening Financial Services

The integration of technology in the financial industry has brought benefits such as faster transactions and greater accessibility.

Technological advancement has impacted different sectors of the economy, including financial services. While the integration of technology in the financial industry has brought benefits such as faster transactions and greater accessibility, it has also generated new risks.

The World Economic Forum has recently published a report in collaboration with Deloitte, which identifies the main technological risks that could become systemic threats to the financial sector.

The first of these is cyber-attacks, which could jeopardise the security and privacy of users, as well as the stability of financial institutions.

Another risk is the possibility of stock market manipulation through social media. Today, social networks have become a means of disseminating information and opinions that can influence investors’ behaviour and thus the value of shares.

The third risk mentioned in the report is the BNPL (Buy Now, Pay Later) payment method. This payment method has gained popularity in recent years, especially in e-commerce, but has also raised concerns about the increase in debt it can generate among consumers.

The World Economic Forum report also mentions geopolitical risks, such as the exposure of the financial system to nation-state cyber-attacks. If these risks become systemic, they could have a profound economic impact on people and global economies.

To mitigate these risks, the report recommends the adoption of specific strategies to boost confidence and strengthen the stability of the financial system. It also suggests breaking down information silos to better identify risk at the ecosystem level and ensuring that predictive analytical capabilities reflect geopolitical and regional uncertainty so that resilience measures can be implemented.