The Risk Management Maturity Assessment: The Case of Indonesian Fintech Firm

Proceedings of ‏The 4th International Conference on Research in Management and Economics

Year: 2021

DOI: https://www.doi.org/10.33422/4th.imeconf.2021.05.21

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The Risk Management Maturity Assessment: The Case of Indonesian Fintech Firm

Franciskus Antonius Alijoyo, Ivonne Bonita, and Kevin Bastian Sirait

ABSTRACT: 

The purpose of this paper is to determine the risk management maturity level of an Indonesian financial technology (fintech) firm, uncovering the root cause of the firm’s risk management maturity level, its barriers and challenges in implementing effective risk management, and provide recommendations for improvements. The Risk and Insurance Management Society – Risk Maturity Model is applied to assess the firm’s risk management maturity level. Furthermore, direct observation and interviews are also performed to analyze the firm’s enterprise risk management practices. The risk management maturity level of the Indonesian fintech firm is at the lowest level (i.e., ad-hoc). The firm’s past successful experiences lead to an apathetic attitude in embedding the risk management concepts within its practice, and this attitude affects the firm’s judgment and decision-making capabilities in coping with its risks. Consequently, it significantly hinders the effectiveness and efficacy of the firm’s risk management practice. This paper uncovers the risk management maturity level of an Indonesian fintech firm, in which the firms with similar circumstances can use the findings and recommendations from this paper to improve their risk management maturity.

Keywords: Risk and Insurance Management Society, Risk management maturity, Risk maturity model, Financial technology, Enterprise risk management.