This research explores the implications for risk, of six AI-focused Fintech business models, identified in the previous research. While each of the six business models has been validated in previous research, their typical influence on risk has not been sufficiently explored
The first three of the six AI-focused finance business models, apply to existing financial companies. These are (1) concentrating on a reduced number of financial services, and a smaller part of the value chain, (2) keeping the business model unchanged, and absorbing AI into existing processes, and (3) expanding beyond their current model, without sacrificing existing services.
The last three AI-focused Fintech business models, apply to organizations that did not previously offer financial services. So, the last three are (4) a dedicated finance disruptor, typically a startup, (5) a tech company offering financial services, and finally (6) is a disruptor not focused on technology, with large user-base offering new financial services.
Table 1. The first AI-focused Fintech business model and its risks ranked (focus and disaggregate)
The eight risks related to the application of an AI-focused business model identified are: (1) Direct AI risks, (2) technology integration risk, (3) third-party vendor risk, (4) technology infrastructure risk, (5) data protection and privacy risk, (6) cybersecurity risk, (7) fraud and identity theft risk, and finally (8) strategic misalignment risk. The eight risks apply to all six models, however, they are not equally significant in all models. For example, in table one we see the ranking of the eight risks for the first AI-focused business model.
The six business models reduce risk in two main ways: Firstly, because they are proven models, and secondly because they have a proven place in the emerging financial ecosystem.
While the Fintech business models do not necessarily increase risk, and may indeed reduce it, because of the change in the nature of the risk involved, trust needs to be built with all the stakeholders.
These are the main findings of this research.
Reference for chapter 7:
Zarifis A. & Cheng X. (2026) ‘Identifying and ranking the eight risks of AI for each of the six main AI-focused Fintech business models’ In Nahidi N. & Zarifis A. (eds.) ‘AI, Fintech, and the future of robo-advisory’, Springer: Cham. https://doi.org/10.1007/978-3-032-18109-1_7 (open access)