Digital Transformation of Capital Market Infrastructure

Abstract

Digital transformation is taken in the article as changes in business models inspired by “new technologies” (cloud, artificial intelligence, big data, distributed ledgers etc.), by threats of disruption from new competitors (FinTech startups and big techs), and by growing demand for individualized and integrated services distributed via digital channels. In this sense, digital transformation means platformification, i.e. when business is developed through digital information systems connecting buyers with sellers, including third-party service providers. Financial institutes, while selling their native services on platforms and/or orchestrating platforms, are able to position their proposals as technological, thus making the modern financial mantra (“Work like Google”) true. The article outlines the distinctions between the platform business model and the traditional pipeline model; compares the definitions of “platform”, “marketplace” and “ecosystem”; summarizes domestic and international experience of platformification in capital market infrastructure (exchanges/trading venues, CCP clearing houses, central securities depositories etc.); differentiates the models of such platformification according to where they lead away from business as usual: onto other markets (mono- and multi-product platforms), to other services (“universal platforms” and digital asset platforms) or to other interactions (platforms for non-core services, “at the top of exchange” platforms, “apps warehouses”); and describes the place of platformification in growth strategies—both real ones, including the Moscow Exchange Group case, and hypothetical ones in line with the Ansoff Matrix.