Digital transformation of the financial industry: The substance and trends

Ivan D. Kotliarov
Additional contact information
Ivan D. Kotliarov: National Research University Higher School of Economics (St. Petersburg), Saint Petersburg, Russia

Upravlenets, 2020, vol. 11, issue 3, 72-81

Abstract: Digital transformation (digitization) of the financial industry is the reason behind the deep change in the models of interaction between actors in the financial market. However, a generally accepted interpretation of digitalization has not yet been proposed. The paper discusses the distinctive features of the financial industry digitalization and uses them as a basis for offering a unified description of the nature of this transformation. The methodological framework is the notion of three types of innovation – technology, organization, and product. The research methods used in the article are analysis and synthesis. The paper demonstrates how the types of innovation determine the nature of the digital transformation of the financial industry and how they are manifested in various digital financial products. Digital transformation of finance includes two aspects: (a) Fintech revolution, i.e. technological companies entering the financial market, and (b) adoption of innovative digital technologies by traditional financial companies. We propose the 4U model to describe the marketing aspect of the financial industry digital transformation and introduce the concept of flexible finance as a way to provide financial services that suggest lower liability of financial institutions. The research results show that, firstly, digital transformation of the financial industry is not limited to the technological aspect but also includes organizational and product-related elements. Secondly, the trends in the financial industry digitalization are similar to those in the digital transformation of the global economy.

Keywords: market development; Fintech revolution; financial technologies; digitization; financial institutions; innovation; financial industry (search for similar items in EconPapers)
JEL-codes: G20 G29 O39 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://upravlenets.usue.ru/images/85/6.pdf (application/pdf)
http://upravlenets.usue.ru/ru/-2020/654 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:url:upravl:v:11:y:2020:i:3:p:72-81

DOI: 10.29141/2218-5003-2020-11-3-6

Access Statistics for this article

Upravlenets is currently edited by Yulia S. Bausova

More articles in Upravlenets from Ural State University of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Victor Blaginin ().