Financial Institutions of Emerging Economies: Contribution to Risk Assessment
Popova Y. Cernisevs O. Popovs S. Kalimoldayev A.
September 2025Multidisciplinary Digital Publishing Institute (MDPI)
Risks
2025#13Issue 9
Conventional risk assessment frameworks usually define risk as a function of vulnerabilities and threats, but they frequently lack a single quantitative model that incorporates the unique features of each element. In order to close this gap, this paper creates a flexible, open, and theoretically sound risk assessment formula that is still reliable even in the absence of complete vulnerability data. This is particularly important for financial institutions operating in emerging markets, where regulators rarely provide centralized vulnerability assessments and where Basel-type frameworks are only partially implemented. The contribution of the paper is a practically verified Bayesian network model that integrates threat likelihoods, vulnerability likelihoods, and their impacts within a probabilistic structure. Using 500 stratified Monte Carlo scenarios calibrated to real fintech and banking institutions operating under EU and national supervision, we demonstrate that excluding vulnerability impact from the model does not significantly reduce the predictive performance. These findings advance the theory of risk assessment, simplify practical implementation, and enhance the scalability of risk modeling for both traditional banks and fintech institutions in emerging economies.
Bayesian networks , emerging economies , probabilistic modeling , risk assessment methods , threat modeling , vulnerability and threat impacts
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Transport and Telecommunication Institute, Faculty of Management and Logistics, LV, Riga, 1019, Latvia
SIA StarBridge, Riga, LV-1050, Latvia
Institute of Life Sciences and Technologies, Daugavpils University, Daugavpils, LV-5401, Latvia
Higher School of Economics and Business, Al-Farabi Kazakh National University, Almaty, 050051, Kazakhstan
JSC “The Fund of Problem Loans”, Almaty, 050051, Kazakhstan
Transport and Telecommunication Institute
SIA StarBridge
Institute of Life Sciences and Technologies
Higher School of Economics and Business
JSC “The Fund of Problem Loans”
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