Abstract
Due to the rise in the demand for information communication technologies (ICT), the need for operational risk resilience within the European insurance market sector has grown exponentially. This study aims to use the case of blockchain to evaluate whether the five characteristics determined from the literature to be required for effective digital risk resilience (specifically, integration, flexibility, reliability, relevance, and timeliness) have an impact on effectiveness in addressing the requirements of the European Union’s proposed Digital Operational Resilience Act (DORA). To achieve this, we developed a survey with 29 statements, which participants were required to answer using a five-point Likert scale. In total, 513 valid responses were received from participants. These were analyzed using exploratory factor analysis (EFA), confirmatory factor analysis (CFA), and structural equation modeling (SEM). Results show that in the case of blockchain, reliability, flexibility, and relevance were found to significantly relate to its effectiveness in addressing DORA’s requirements, but relationships of effectiveness with integration and timeliness were found to be insignificant. However, when the experience variable was added to the model as the moderator variable, we found that timeliness and relevance have a significant relationship with blockchain effectiveness, while integration, reliability, and flexibility do not.
Highlights
The importance of information communication technologies (ICT) within the financial sector has been and continues to be increasing exponentially, even more so during the current COVID-19 pandemic
In Europe alone, there has been a 72 percent increase in the use of financial ICT applications. This reliance on ICT has not gone unnoticed by criminals, and since the COVID-19 pandemic began, there has been a substantial increase of 38 percent in cyberattacks on financial service firms (European Commission 2020a)
Our focus is on European Union insurance undertakings, where we aim to determine the impact of the perceived effectiveness characteristics on the perceived effectiveness of blockchain in meeting the digital operational resilience requirements as established by our model and through a literature review
Summary
The importance of information communication technologies (ICT) within the financial sector has been and continues to be increasing exponentially, even more so during the current COVID-19 pandemic. In Europe alone, there has been a 72 percent increase in the use of financial ICT applications This reliance on ICT has not gone unnoticed by criminals, and since the COVID-19 pandemic began, there has been a substantial increase of 38 percent in cyberattacks on financial service firms (European Commission 2020a). Blockchain is a digital platform that was developed for Bitcoin, which is a decentralized digital currency. It was first designed as a peer-to-peer electronic payment system for anonymous transfer of bitcoins without the need for a third-party authority such as the European Central Bank, Federal Reserve, or government in general (Corbet et al 2019)
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