Abstract
The development of financial technologies in Russia is an essential driver for the digitalization of socio-economic processes. The objective of this study is to identify trends in the formation and development of financial technologies (fintech) in Russian practice. Based on the analysis of international research in the field of fintech, a number of hypotheses have been formulated that serve as the basis for determining the patterns of development of fintech in Russia. The duality of the relationship between the level of development of the economy and the fintech sector is determined: the level of development of the economy is able to both restrain and stimulate the development of financial innovations. In order to test the hypotheses, a correlation and regression analysis was carried out, which made it possible to determine the influence of various indicators on the development of financial innovations in Russia. The national federal statistics of the Russian Federation, reports of the Central Bank of Russia, statistical data provided by the Russian Association of Venture Funding, the GfK (Growth from Knowledge) database, and data from the Moscow Exchange were used as the data sources. The Patent Lens database was used as a source of data on the development of fintech in the Russian Federation. Results of the study have demonstrated the following trends in the development of financial technologies in Russian conditions: (1) an increase in the gross domestic product of Russia contributes to the development of fintech, which is indicated by the development of financial technologies depends on the state of the economy; (2) negative dynamics of direct investment affects the development of financial technologies in Russia, which shows the connection between the development of financial technologies and institutional voids in the investment sphere; (3) the spread of the use of mobile devices in Russia contributes to the development of fintech (4) the development of the Moscow Exchange, which is one of the main indicators of the state of the capital market, has a positive impact on the development of financial technologies in Russia. The theoretical significance of the results obtained is in identifying trends in the development of financial technologies in Russian practice. The practical significance is the possibility of using the results obtained in developing a strategy for the development of the financial sector and the financial system in the domestic economy.
Highlights
The financial industry is experiencing an ongoing transformation
For member states of the European Union (EU), the European Securities and Markets Authority (ESMA) announced in 2008 that it considers the operator of a social trading network to exercise “investment discretion by automatically executing the trade signals of third parties” and requires it for an authorisation in relation to portfolio management as per Markets in Financial Instruments Directive (MiFID)
The dashed and dotted lines show the results for this regression when using solely the 50% of signal providers with the lowest and highest leverage variation, respectively
Summary
While signal providers de facto manage the follower’s brokerage accounts, an immediate legal relationship solely exists between the two user groups and the social trading network as an intermediary: besides routing trading signals, the platforms attempt to diminish the resulting agency problems (see [Bhattacharya and Pfleiderer, 1985]). According to Sirri and Tufano [1998] and Chevalier and Elison [1997], this incentivizes for excessive risk-taking by virtually providing the manager with limited liability They find that mutual fund flows are much more sensitive towards relatively good than bad historical returns, leading to a de facto asymmetric and convex compensation scheme. Though a compensation scheme that can be considered optimal from a theoretical point of view has not been found for a delegated portfolio management framework yet, there is empirical evidence for contracts containing a HWM to reduce excessive risk-taking Note that the choice of compensation scheme is of particular relevance for the commercial success of the network operators: as talented signal providers attract additional investors and vice versa, social trading platforms are a two-sided market – both user groups induce positive external effects (see Rochet and Tirole [2003]). It should discourage charlatans from engaging with the platform in order to ensure investor satisfaction
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