Challenges of Investment Risks and Reliability in the Digital Finance Market

Abstract

The rapid evolution of the digital finance market, driven by the proliferation of cryptocurrencies, decentralized finance (DeFi), and financial technologies (fintech), has opened new investment opportunities while simultaneously presenting serious risks. These include high market volatility, cybersecurity vulnerabilities, and significant regulatory uncertainty. This paper explores the dual challenge of managing investment risks and building reliability within digital finance ecosystems. Using a mixed-methods approach combining a systematic literature review and qualitative expert interviews, the study examines key risk categories—technological, operational, behavioral, and institutional—and how they affect investor confidence. Findings show that the lack of standardized regulation, frequent security breaches, and insufficient investor education contribute to instability and distrust. In response, the paper proposes a multi-layered framework for mitigating these challenges through digital infrastructure enhancement, risk governance reforms, and financial literacy promotion. It also draws on international case studies to identify best practices applicable to emerging markets. The study contributes to academic and practical discourse by offering policy recommendations aimed at developing a more secure, transparent, and inclusive digital financial environment that aligns with sustainable investment goals.