Fintech, which combines finance and technology, is reshaping how we manage and interact with money. The research by Sunway University's Dr Sahar Afshan and colleagues delves into its impact on various aspects of finance, particularly digital currencies like Bitcoin, and how different currencies compare against each other (exchange rates). To start, imagine Fintech as a catalyst in the financial world. Its growth positively influences the stability and development of digital currencies and exchange rates. It's like having an intelligent tool that makes financial transactions easier and introduces new, user-friendly methods for dealing with money, making it more accessible to a broader audience.

This research also explores how Fintech interacts with fluctuating oil prices and financial risks. Typically, these factors cause uncertainty in the financial markets. However, Fintech is a stabilising force, reducing the unpredictability of these economic elements. The methods used in this research are advanced, akin to using sophisticated tools to understand complex relationships. These tools help unravel the intricate connections between Fintech, digital currencies, exchange rates, and broader economic factors, providing insights into immediate and long-term effects.

Fintech is doing more than just speeding up financial transactions; it's altering the entire landscape of traditional financial markets. It's changing the way financial risks are managed and influencing how global currencies interact with each other. The research sheds light on how digital currencies are not isolated entities; they are influenced by more significant economic trends, such as oil prices and market risks.

This understanding is essential for grasping the future role of digital currencies in the global financial system. The significance of this research lies in its comprehensive approach to understanding Fintech's varied impacts on finance. It offers a broad perspective on how technological advancements are revolutionising financial practices. However, the research also acknowledges its limits, highlighting the need to explore further Fintech's long-term effects and interactions with other economic sectors.

The research highlights the significant influence of technology in transforming financial transactions, risk management, and the behaviour of digital currencies, indicating a substantial shift in how financial markets operate, driven by technological innovation and its integration into traditional economic systems.

This research contributes to our academic understanding of Fintech and provides practical insights for policymakers, financial institutions, and investors navigating this evolving landscape. As Fintech continues to develop, its impact on the financial sector will likely remain a topic of ongoing interest and importance.

Key Implications:
1. Policy Implications: Adapting to Fintech’s Rise
The research underscores the need for regulatory frameworks to evolve alongside Fintech advancements. Policymakers are encouraged to embrace these technological innovations to mitigate financial risks and oil price volatility. This calls for a delicate balance between promoting innovation and ensuring financial stability.

2. Global Collaboration and Standardization
The interconnected nature of digital currencies and Fintech solutions across borders suggests a pressing need for international collaboration. Establishing harmonised Fintech and digital currency standards will be essential for maintaining global financial stability.

3. Risk Management and Financial Institutions
Financial institutions should integrate Fintech solutions into their risk management strategies. This integration can offer new ways to handle financial uncertainties, including those stemming from global economic factors like oil prices.

4. Future of Financial Markets
The research indicates a transformative shift in financial markets driven by Fintech. This shift necessitates continuous monitoring and evaluation of Fintech trends to ensure the economic ecosystem remains innovative yet resilient against emerging risks.

In summary, this research reveals Fintech's transformative influence on finance. The study emphasises the need for adaptive regulations and Fintech integration, from accelerating transactions to stabilising uncertainties. These insights are crucial for policymakers and financial institutions navigating this evolving landscape, highlighting the ongoing importance of monitoring and adaptation for innovation and resilience.

Dr Sahar Afshan
Sunway Business School
Email: @email
 

This article has been adapted from Sahar Afshan, Ken Yien Leong, Arsalan Najmi, Ummara Razi, Bawani Lelchumanan & Calvin Wing Hoh Cheong (2024), Fintech advancements for financial resilience: Analysing exchange rates and digital currencies during oil and financial risk, DOI: https://doi.org/10.1016/j.resourpol.2023.104432