Risks of innovations on the banking market

Abstract

In conditions where the world is digitalizing, and customers tend to seek for low friction and immediacy, banks also tend to transform. The most successful bank products don’t need humans or physical assets. This is leading people to move away from the financial products people used to have in the past, to understanding that utility of financial institutions is now served not through products through a channel, but through a set of platform technologies that enable people to do banking. This shift comes along with new risks for customers. The goal of the article is to highlight the most common risks that come along with innovative bank products and their effects in case of occurrence. The conclusions presented in the article contain the ways the risks may be diminished. JEL: E42. E 50, E 59, O3.