Fractal-faceted model of digitalization risk assessment of banking activity

Abstract

Digitalization of banking activities, while opening up significant opportunities, also generates complex, interconnected risks, the effective management of which is becoming critical to the economic security of banks. Traditional approaches to risk assessment are often insufficiently adapted to the dynamic nature of digital threats, their multidimensionality, and ability to scale rapidly. The current literature lacks a unified typology of digitalization risks and adaptive management models that would comprehensively take into account the interrelationships between risks at different levels - strategic, operational, and tactical. The purpose of the article is to develop and substantiate a fractal-faceted model for assessing the risks of banking digitalization as a tool for overcoming existing methodological gaps and improving the economic security of banks. Methods: The study is based on the methods of system analysis, critical review of scientific literature, classification, structuring, and conceptual modeling. Based on a combination of the fractal approach (which takes into account the self-similarity and escalation of risk structures at the tactical, operational and strategic levels) and facet analysis (which structures risks by key categories/facets), the author's model is developed. The risks are systematized and structured within the proposed model. Results: A fractal-faceted model for assessing the risks of digitalization of banking activities has been developed, which provides a multidimensional and multilevel approach to their identification, analysis and management. The model allows to systematize risks by categories (facets) and levels of their manifestation (tactical, operational, strategic), which is its fractal property. A key feature of the model is the emphasis on analyzing the relationships between different types of risks and their potential escalation between levels, which overcomes the limitations of traditional, often isolated, approaches. The structure of the model is presented and the stages of its practical application are outlined: identification and structuring, assessment and analysis of relationships, aggregation and visualization, and management. It is shown that the model provides complexity, scalability, adaptability and structured analysis. Conclusions: The proposed fractal-faceted model for assessing the risks of digitalization of banking activities allows overcoming the shortcomings of existing approaches through systematic, multilevel and multidimensional analysis, taking into account the relationships between different categories of risks and their manifestation at the tactical, operational and strategic levels. The model provides complexity, scalability, and adaptability, enabling banks not only to identify and assess risks but also to develop effective strategies to minimize them.