Unraveling systemic risk in FinTech companies: Influencing factors, trends, and policy imperatives

Unraveling systemic risk in FinTech companies: Influencing factors, trends, and policy imperatives | Research Square window.SnipcartSettings = { analytics: { enabled: false } }; (function() { var accessVector = localStorage.getItem('access_vector') || ''; window.dataLayer = window.dataLayer || []; if (accessVector) { window.dataLayer.push({ user: { profile: { profileInfo: { snid: accessVector } } } }); } })(); (function(w,d,s,l,i){w[l]=w[l]||[];w[l].push({'gtm.start':new Date().getTime(),event:'gtm.js'});var f=d.getElementsByTagName(s)[0],j=d.createElement(s),dl=l!='dataLayer'?'&l='+l:'';j.async=true;j.src='https://www.googletagmanager.com/gtm.js?id='+i+dl;f.parentNode.insertBefore(j,f);})(window,document,'script','dataLayer','GTM-K279D39R'); Browse Preprints In Review Journals COVID-19 Preprints AJE Video Bytes Research Tools Research Promotion AJE Professional Editing AJE Rubriq About Preprint Platform In Review Editorial Policies Our Team Advisory Board Help Center Sign In Submit a Preprint Cite Share Download PDF Research Article Unraveling systemic risk in FinTech companies: Influencing factors, trends, and policy imperatives Aktham Maghyereh, Nader Atawnah, Mohamed Shaker Ahmed This is a preprint; it has not been peer reviewed by a journal. https://doi.org/ 10.21203/rs.3.rs-6684477/v1 This work is licensed under a CC BY 4.0 License Status: Posted Version 1 posted You are reading this latest preprint version Abstract This paper presents novel empirical evidence on the systemic risk significance of U.S. FinTech companies and explores the factors influencing their systemic risk. Utilizing data from 30 FinTech firms spanning January 3, 2011, to March 31, 2023, we employ two distinct measures, Conditional Value-at-Risk (ΔCoVaR) and Marginal Expected Shortfall (MES), to assess individual firms' exposure and contribution to systemic risk. Our empirical findings reveal considerable variations in systemic risk among FinTech firms and over time. Notably, when investigating the COVID-19 pandemic's impact, our study provides compelling evidence of its role in magnifying the systemic repercussions of FinTech companies. Furthermore, our results unveil associations between systemic risk and diverse factors, including debt default risk, interconnectedness, firm size, profitability, corporate governance, liquidity, asset quality, and firm lifecycle. These findings offer valuable insights for policymakers and regulators seeking to implement proactive measures aimed at safeguarding financial stability within the FinTech sector. JEL classification: G32, G23, C58 Finance Systemic risk FinTech companies Financial crises Full Text Additional Declarations The authors declare no competing interests. Cite Share Download PDF Status: Posted Version 1 posted You are reading this latest preprint version Research Square lets you share your work early, gain feedback from the community, and start making changes to your manuscript prior to peer review in a journal. As a division of Research Square Company, we’re committed to making research communication faster, fairer, and more useful. We do this by developing innovative software and high quality services for the global research community. Our growing team is made up of researchers and industry professionals working together to solve the most critical problems facing scientific publishing. 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