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. Mitigation approaches are dependent upon both learnings derived from past incidents and the possible outcomes of the future.
Deloitte and the World Economic Forum conducted a survey, series of interviews, and global workshops virtually over the past twelve months with over 200 senior leaders and experts at financial institutions, disruptive financial and non-financial technology players, regulatory and policy-making bodies, and academic institutions to understand systemic risks in the financial services industry.
This report defines systemic risks, identifies the most significant short- and long-term risks stemming from the increased use of technology in financial services, highlights the most significant implications, and examines the potential of new technology and innovation in the risk mitigation process.
This report classifies the individual sources of risk into six themes that highlight the role of technology in creating and amplifying systemic risks. They are:
This study is the first of Deloitte and the Forum’s two-part Technology, Innovation and Systemic Risk initiative. From its key insights, this document will allow leaders to dive beneath the surface for a complete view of technology-driven systemic risks and will guide mitigation decision-making.