Call for papers Volume-10, Issue-1, October 2021 Last date of submission : 31-10-2021

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Boniphace Albert Chacha

Risks Accompanied By Financial Technology (fin Tech) Adoption: Theoretical Response On Risks Mitigation And Decision Implications


The study objective is focusing on delivering theoretical knowledge and understanding through focusing on governing human behavior towards responding and mitigating of the perceived risks in the process of adoption Financial Technology (Fin Tech), and further drawing theoretical decision making mechanism and implications on the perceived risks for facilitation Financial Technology adoption process and financial investments management at large in the financial services industry domain. Methodologically the study employed theoretical approach to accomplish the desired goals of the study. The study findings revealed that there is significant potential risks accompanied by the Financial Technology (Fin Tech) adoption process, in the occasion theoretical evidence proving the profoundly relationship between risk and human behavior. Towards mitigating the identified potential risks for facilitation the Financial Technology (Fin Tech) adoption process, indispensably the focus must be on governing the human behavior to mitigate the risks and facilitate the Financial Technology adoption process. From that regard, the study proposed the new model for risk response and mitigation for the Fin Tech adoption perceived risks while the mitigation process is well accompanied and supported by the theoretical arguments. Ultimately the study drawn theoretical decision making mechanism and implications of the perceived risks.

Keywords: Financial Technology (Fin Tech); Fin Tech Adoption Risks; Risks Mitigation: Theoretical Response


Introduction and Theoretical Background


The emerging of Financial Technology is profoundly accompanied by technological benefits and potential risks in the adoption process. From this point of view, the study focusing on developing theoretical knowledge and understanding regarding mitigation of the received risks while rigorously governing the human behavior towards smoothly facilitation the Financial Technology adoption process for the prosperity of Financial Technology, financial Investment management, and the entire financial services industry domain. Three theories were profoundly employed in explicating the entire notion of the study (The Choice Theory, Theory of Reasoned Action, and The Expected Utility Value Theory). In that context of theoretical point of view in explicating the entire notion of the study, the theory of choice profoundly developed and proving the relationships between the risk and the behavior. Furthermore, the theory of reasoned action explicating the narrative of governing the human behavior in responding and mitigating of the perceived risk while focusing on smoothly facilitation of the Financial Technology (Fin Tech) adoption process. Ultimately, the Expected utility value theory demonstrating the decision making mechanism and implications for the perceived risks in the process of adoption Financial Technology (Fin Tech).

The Financial Technology (Fin Tech) symposium and emerging has become the inevitable and indispensable in the financial services industry domain considering the fact that it has accompanied by perennial technological benefits such as elimination of the intermediary (middle man) costs in undertaking the financial services transactions. However some researchers and practitioners pose skeptical view point and some doubts that financial technology (Fin Tech) is not the efficacy remedy solution for confronting the recent financial services industry challenges because of the potential risks accompanied by financial technology in the adoption process.

The meaning of financial technology basically coming from the narrative of regarded financial technology which plays the role of taking out the costs of engaging the financial intermediaries in performing the financial transactions, (Das 2019). Fin Tech is primarily the product of the word Financial Technology. The emerging of Fin Tech is triggered by the recent sophisticated of information technology which accompanied by the innovation of financial services to bring out Fin Tech, (Ryu 2018).  Globally, according to the report of EY Financial Technology Adoption Index, explicating that the Financial technology is about 33% adopted in the year of 2017, (Gerlach and Lutz 2019). The recent proliferated growing and advanced of Information technology triggered the new and innovative financial services termed as Financial technology (Fin Tech), (Ryu 2018). The financial technology developments triggered the efficient information accessibility, removing of the middle agents, reduction of costs, and escalating transparent in financial transactions, (Ryu 2018). Exemplifying the pragmatic examples of fin tech services are such as mobile payment and remittances and personal finance management, (Ryu 2018).