The present paper explored the impact of fintech adoption on the effectiveness of risk management with mediating variable being digital financial literacy in the Saudi Stock Exchange (Tadawul). The research design adopted by the researcher was a quantitative research design that utilized Partial Least Squares Structural Equation Modeling (PLS-SEM). Out of 370 active investors and financial professionals that work in Tadawul- listed institutions, data was gathered. The research paper investigated the effectiveness of fintech application, algorithm trading applications, mobile trading systems, digital payment systems, and robo-advisory services in improving the capacity to evaluate and respond to risk and performance in risk controlling. To test the hypothesized relationships and verify the mediating effect of digital financial literacy, the structural equation modeling was used. The findings indicate that the effectiveness of risk management can be significantly enhanced through the adoption of fintech that will allow obtaining real-time data, automated data analysis, and greater transparency in investment choices. Moreover, digital financial literacy as an intermediating variable can convert the use of fintech into knowledgeable decision-making, successful interpretation of digital financial data, protection against financial and cyber risks. The results reveal that digitally literate investors can benefit more using fintech tools to detect, evaluate, and reduce market volatility and operational risks. The paper suggests that organizations and regulators in Tadawul should invest in the enhancement of digital financial literacy interventions, investor education, and risk awareness interventions driven by fintech. Digital financial competence will allow investors to optimize the use of fintech solutions, contribute to the sustainability of the increase in the effectiveness of financial stability and risk management throughout the Saudi capital market.