Published Online:December 2024
Product Name:The IUP Journal of Financial Risk Management
Product Type:Article
Product Code:IJFRM031224
Author Name:Kinda Augustin
Availability:YES
Subject/Domain:Finance
Download Format:PDF
Pages:47-55
This paper examines the potential effects of digital innovations on the stability of the financial system in WAEMU countries over the period 2007 to 2022. Using annual data, the study applies fixed effects method, random effects estimation method, generalized least squares and panel corrected standard errors to assess the impact of digital innovations on the financial stability of WAEMU countries. The results indicate that digital innovations pose a threat to the stability of the financial system as they negatively influence financial stability. Inflation also has a negative impact on the stability of financial institutions. Migrant transfers, on the other hand, improve the stability of financial institutions. It calls for strengthening the regulatory framework to protect financial institutions.
Technology has changed many aspects of life, including the financial system. The financial sector has undergone significant changes in recent decades, which are reflected in technological innovations, legal and regulatory adaptations, and changes in consumer habits and aspirations (Agur et al., 2020). Financial technologies are transforming the face of financial institutions, creating new business models, applications, processes and products for the benefit of consumers (Arner et al., 2015; and Feyen et al., 2021).