The Impact of Financial Technology on Financial Stability: A Critical Review

Sara Focacci(Department of Business Sciences, University Giustino Fortunato, 82100 Benevento, Italy)
Thomas Rughi(Department of Business Sciences, University Giustino Fortunato, 82100 Benevento, Italy)

Abstract

This article presents a critical review of the impact of financial technology, or FinTech, on financial stability. The rapid advancement of FinTech in recent years has significantly altered the traditional financial system. Through an examination of academic research and practical cases, this review analyzes how FinTech has transformed the operations of the financial industry and its potential consequences for financial stability. The study finds that FinTech has positively contributed to enhancing financial efficiency, promoting financial inclusivity, and innovating financial products. However, it also poses some new challenges, such as technological risks, regulatory arbitrage, and market instability. Therefore, this article emphasizes the importance of strengthened financial regulation, improved legislation, and enhanced technological security in the context of rapid FinTech development to ensure financial stability and protect consumer interests.

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DOI: http://dx.doi.org/10.26549/jesr.v6i1.15939