Abstract
Digital finance plays a major role in achieving financial inclusion targets which have a positive impact on economic growth and people's welfare. One of the main elements of digital finance is digital payments, which are increasingly playing a role with the presence of e-commerce and financial technology (fintech). Apart from these positive impacts, digital finance is also feared to have a negative impact on financial system stability, especially in relation to systematic risk. The purpose of this study was to determine the role of risk factors in digital financial relations and financial stability. The research method used is the Multiple Linear Regression Model and Moderating Regression Analysis (MRA), using 120 samples of panel data for 10 years (2010 to 2019). The results show that market risk can moderate the influence of digital finance on financial stability, so that increased systematic risk will reduce the positive impact of digital finance on financial stability.
Highlights
Financial inclusion is a target that all countries must achieve, financial inclusion is believed to have a positive impact on economic growth and the prosperity of society
The results show that market risk can moderate the influence of digital finance on financial stability, so that increased systematic risk will reduce the positive impact of digital finance on financial stability
It is hoped that increasing digital payments as the main element of digital finance and driving financial inclusion will not have a negative impact on financial stability, which the monetary authority must always maintain, but it is expected to be able to help authorities maintain financial stability
Summary
Financial inclusion is a target that all countries must achieve, financial inclusion is believed to have a positive impact on economic growth and the prosperity of society. One of the efforts to achieve this financial inclusion target is through digital finance, namely financial products and services that use internet technology that makes it easier for people to directly access various kinds of payments, shopping, savings, investments, including loan and credit facilities. The use of digital payment systems as one of the main elements of digital finance has been accelerating by the significant growth of online shops (e-commerce) and the presence of financial technology (fintech) This condition is very helpful in achieving the target of financial inclusion, but on the other hand it has raised concerns from various parties, both monetary authorities and academics, about the impact on financial stability. This research is a different and recent study on the topic of the influence of digital finance on financial stability
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