Year: 2025
Type: article
Abstract: With the rapid development of the financial market, the volume of financial data has become increasingly large and complex, and the advantages of using big data methods to analyze systemic financial risks have become increasingly prominent. This paper deeply discusses the application of financial big data in systemic risk early warning, aiming to provide theoretical support and practical guidance for improving financial risk prevention and control ability.Traditional systemic risk analysis mainly focuses on individual financial institutions, which has limitations and cannot fully capture the correlation risk exposure and the potential domino effect threat to the stability of financial markets. It is therefore crucial to assess exposures at the level of the financial system as a whole. However, the complexity of the financial system is increasing, and the financial data faced by risk analysis is characterized by huge volume, complex types and strong correlation, which brings challenges to the prevention and control of financial risks.Big data methods, including machine learning, data visualization, information extraction and other technologies, provide new solutions for systemic financial risk early warning. Information extraction technology helps to extract valuable information from unstructured text data, such as investor behavior, sentiment changes, etc. These data can reflect changes in the financial market in real time, and is an important source of supplementary information for systemic financial risk analysis. Machine learning algorithms can integrate multi-source data, automatically learn and identify different credit risk levels, and improve the accuracy and efficiency of risk assessment. Data visualization technology can clearly and intuitively show financial micro-data in the form of graphs and charts, and help analysts quickly understand the relationship and trend between data.This paper analyzes the application cases of big data technology in financial contagion mechanism analysis, financial supervision and other aspects, and demonstrates the practical effect of big data methods in systemic risk early warning. By integrating financial micro-data of various financial sectors and even different countries, and analyzing financial risks as a whole based on the data, big data methods can more comprehensively capture the potential threat of systemic risks and provide timely and accurate early warning information for financial regulators.At the same time, this paper also points out the challenges faced by big data in the early warning of financial systemic risk, such as data security and privacy protection, technical threshold and capital investment, and puts forward corresponding solutions. It is emphasized that financial institutions need to strengthen data protection measures, establish a sound risk prevention and control system, increase scientific and technological investment and personnel training, and ensure that the application of big data technology in the financial industry achieves positive results.To sum up, financial big data plays an important role in the early warning of systemic risks and provides strong support for improving the ability to prevent and control financial risks. In the future, with the continuous development and improvement of big data technology, its application prospects in financial risk early warning will be broader.
DOI: 10.54691/hmp8tc13
Author: Chen Qiu
Institution: Fordham University
Language: English
Subfield: Finance
Domain: Social Sciences
Open Access status: hybrid
OpenAlex ID: W4408950852