The evaluation of the impact of financial technologies innovations on CEECs capital markets

Abstract

THE EVALUATION OF THE IMPACT OF FINANCIAL TECHNOLOGIES INNOVATIONS ON CEECs CAPITAL MARKETS Although there is a number of researchers studying innovations in general specifically pointing out the risky nature of financial innovations, and the necessity to study their impact the empiric studies describing the effect of the innovations in financial technologies upon capital markets are scarce. There is no credible evidence leading to an unambiguous conclusion as to the impact of innovation in financial technologies upon the development of capital markets in Central and East European countries (CEECs). Thus, the main scientific problem of this article is the lack of reliable quantitative evidence of the impact of innovations in financial technologies on capital market development in CEECs. According to that, the aim of this article is to assess the impact of the financial technologies innovations upon the capital markets of the CEECs on the basis of the most recent available data (2006-2017). The study methods employed by the authors included an analysis of the relevant scientific literature, comparative dynamic analysis, panel data models (constant, fixed and random effects) and other statistical methods. As a result, the panel model of the impact upon the capital markets in CEECs is developed based on the analysis of the data from 9 Central and Eastern European countries for a period of 12 years (2006-2017). The model suggested by the authors explains almost four fifths of the changes in the capital market expressed in the capitalisation indicator.The panel models of constant, fix and variable effects is an evidence of a negative statistically significant impact of the summary innovation index reflecting the level and the scope of financial technologies upon the development of capital markets in the Central European States when the other selected macroeconomic variables remain in control. The panel model of development of capital markets also showed that a statistically significant positive impact upon the capital market development in CEECs was produced by forecasted GDP growth, inflation and capital investment factors (variables). On the other hand, foreign direct investment, unemployment, interest rate, public debt, government budget deficit do not have a statistically significant impact upon the development of capital markets in the selected CEECs. The model constructed by the author is characterised by fairly high reliability and determination indicators, therefore, may be used for the purpose of a further assessment and projecting of the impact of financial technologies and other actions upon the development of the capital markets.

Impact of digitalization and the COVID-19 pandemic on the AML scenario: Data mining analysis for good governance

“…Numerous studies deal with the analysis of the digitalization impact on the functioning of financial markets, in particular, determining the impact of financial technologies on capital markets (Paskevicius & Keliuotyte-Staniuleniene, 2018), assessing the digitalization of financial services (Pakhnenko et al, 2021), studying the features of e-banking (Alam et al, 2021), analysis of prospects for investing-sustainable and responsible investing in the digital age (Formankova et al, 2018).…”

Development of Databases Structure of Internal Economic Agents Financial Monitoring

“…Database and normative-reference information, which is formed on the basis of internal sources of economic agents, are the following: client's financial monitoring questionnaire [10]; list of risky clients according to the system of economic agent [24]; the list of clients for which there are court rulings and financial transactions which may contain signs of risk; list of PEP clients of the economic agent (list of politically important persons, members of their families and related persons who are clients of the high-risk bank in accordance with international anti-money laundering standards); list of clients for which there is a share of state ownership (PSP); list of prohibited industries; directories of codes (directory of code of type of financial transactions; directory of code of sign of financial transactions of obligatory financial monitoring; directory of code of sign of financial transactions of internal financial monitoring; directory of code of identity document; directory of code of type of subject of primary financial monitor; notification, directory of the legal status code of the transaction participant, directory of the type code of the person associated with the financial transaction, directory of the code of permission to submit information, directory of the code of the financial transaction, directory of the region of Ukraine, directory of the decision); directory of risk criteria; clients with FATCA status. The scheme of structure of databases and normative-reference information of internal financial monitoring of economic agents on the basis of internal sources is developed with use of the Bizagi Studio software product and modern notation of modeling of business processes BPMN 2.0 (Fig.…”

Economic development versus the growing importance of the financial sector: Global insight

“…It has led to a situation where some solutions involving innovative financial technologies have become the only platform for performing operations and technological processes. What is more, technological innovations have become an important tool to compete in the financial market (Paskevicius & Keliuotyte-Staniuleniene, 2018). As a result, new financing methods, virtual money (cryptocurrencies), and complicated algorithms for decision making, innovative entities (Bayón & Vega, 2018) have emerged.…”

“…It leads to a situation where specific innovations have become the only possible way of performing operations and technological processes. What is more, they have become a way of competing (Paskevicius & Keliuotyte-Staniuleniene, 2018;Bilan et al 2019). It means that the introduction of 4IR solutions to the financial sector not only benefits the industry itself but also serves the needs of society by making products or investments available to anyone who wants a higher rate of return (Li et al, 2021;Su et al, 2020).…”