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Beneath the Surface: Technology-driven systemic risks and the continued need for innovation

Published on: Oct 28, 2021

The accelerated adoption of technology in financial services is giving rise to new sources of risk, which can accumulate across the ecosystem to form systemic risks. These risks are often difficult to interpret and anticipate, and hence, not easily mitigated.

This report by Deloitte and the World Economic Forum explores technology-driven systemic risks in the financial services industry and the plausible ways to mitigate them. Insights were sourced from over 200 senior leaders and experts at financial institutions, disruptive technology players, regulatory and policy-making bodies, and academic institutions.

The study classifies the individual sources of risk into six themes that highlight the role of technology in creating and amplifying systemic risks, and explores the ways in which the technologies themselves can be deployed in their mitigation.

The systemic risk themes are:

  • Digital interdependencies
  • Shared model vulnerabilities
  • Gaps in entity-based regulation
  • Conflicting national priorities
  • Emerging sources of influence
  • New drivers of financial exclusion

Outcomes from the report reinforce that it is not only essential for leaders within the financial services ecosystem to have a solid understanding of the risks forming as a result of the increased use of technology in financial services, but of equal importance is collaboration across ecosystem players as solutions are devised.

Deloitte will produce an executive summary of this report which will be available in a few weeks.

This publication was released by our Global firm.

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