Research on the Evolution Characteristics and Prevention Mechanisms of Financial Risks Driven by Smart Financial Technologies

DOI

10.2991/978-94-6463-811-0_89How to use a DOI?

Keywords

Smart Financial Technologies; Financial Risk Evolution; Systemic Risk; Adaptive Risk Management

Abstract

In the age of digital transformation, intelligent financial technology encompasses artificial intelligence (AI), Big Data Analysis, blockchain, and machine learning. The efficiency and availability of financial services are increasing, and risks take on unprecedented characteristics. This study examines the evolution of financial risks in technological disruptions, combining global sets of financial data and a regulatory framework for empirical analysis.After qualitative comparison and quantitative modeling, three characteristics of risk evolution were identified: (1)complexity was increased, and Risk Factors in an intelligent financial system increased by 40% compared to traditional adjustment, and interdependence increased by 60% (see Table 1); (2) the spread of risk has accelerated, and the algorithmic trading network has reduced the spread of market risks from 24 h to 2–3 h (IMF, 2024); (3) blockchain-related cyber attacks and a 15% increase in algorithmic risks. Deviations in credit ratings of ethnic minorities (Scholtens, 2024). 2023; Pagnotta, 2023).

To address these challenges, a prevention system was developed within this study in three areas: regulatory technology (regtech) uses artificial intelligence to monitor transactions in real time, and the accuracy of detecting fraudulent activities can be increased up to 92%; advanced data management integrates data lifecycle management in accordance with GDPR and risks privacy is significantly reduced in big data analysis; the hybrid risk assessment model combines credit scores with alternative data (as what a empirical analysis of 50 banks around the world shows is between 2021.and 2023. Year, so that the number of incidents related to operational risk in an organization related to the implementation of this system was reduced by 35%. Combining technological innovation and risk management resilience, the research provides a theoretical framework for Adaptive Risk Management and provides practical information to regulators. Shortens the time period between innovation in financial technology and regulatory response (18 months) (Zetzsche et al.2007)., 2024). The results of this study emphasize that in the age of intellectual finance, a proactive technology-based strategy needs to be implemented to ensure sustainable financial development.

Copyright

© 2025 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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TY  - CONF
AU  - Hangle Zhou
PY  - 2025
DA  - 2025/08/14
TI  - Research on the Evolution Characteristics and Prevention Mechanisms of Financial Risks Driven by Smart Financial Technologies
BT  - Proceedings of the 2025 5th International Conference on Enterprise Management and Economic Development (ICEMED 2025)
PB  - Atlantis Press
SP  - 826
EP  - 833
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6463-811-0_89
DO  - 10.2991/978-94-6463-811-0_89
ID  - Zhou2025
ER  -