Bridging Data Science and Sustainable Financial Innovation

Springer Contributed Volume — Statistics and Computing in Practice
Series Editor: Wolfgang K. Härdle

Chapter 1: Foundations of Digital Finance

Digital finance technologies — algorithmic trading, blockchain, AI/ML, digital banking, and regulatory technology — are converging into a unified programmable financial infrastructure. This chapter provides the conceptual foundation for the volume by proposing a three-dimensional taxonomy (function × technology × disruption level), surveying five core technology domains, and examining both the sustainability opportunities and systemic risks that convergence creates. It treats sustainability as a standalone analytical dimension, confronts landmark failures (Terra/Luna, FTX, flash crashes), and maps open research questions onto the MSCA DIGITAL doctoral network.

Chapter Contents

Introduction
A Conceptual Framework for Digital Finance
Technology Foundations and Literature
Data Infrastructure and the European Financial Data Space
Risks, Failures, and Systemic Concerns
The Sustainability Dimension
Research Frontier and Open Questions
Conclusion and Outlook

Volume Overview

This volume examines the convergence of data science, digital finance, and sustainability. It is produced under the MSCA DIGITAL doctoral network, bringing together researchers across five thematic areas: the European Financial Data Space, AI in financial markets, explainable and fair AI, blockchain and decentralised finance, and the sustainability of digital finance.

Source code, LaTeX manuscript, and BibTeX references are available in the GitHub repository.

Funding: This project has received funding from the European Union's Horizon Europe research and innovation programme under the Marie Skłodowska-Curie grant agreement No 101119635 (DIGITAL — Digital Finance: Reaching New Frontiers). Coordinator: Universiteit Twente, 2024–2027. EU contribution: €3,792,542.40.