During digital transformation of the economy, the existing business models have being reviewed on the basis of new structures - digital business ecosystems reflecting the convergence of digital technologies and processes used in business practice and in the market, leading to increased profitability and customer value. According to the authors, one of the most dynamic sectors of the digital economy is digital financial services, which are an integral part of most digital business ecosystems. Digital financial services brought to the market by FinTech companies and banks, interacting with each other and with many other digital services, create complex digital products that carry higher value for end users than traditional products. In order to participate in digital business ecosystems, financial industry enterprises establish digital ecosystem strategies. An analysis of scientific publications shows that the issue of modelling digital financial services taking into account the characteristics of digital business ecosystems is underdeveloped, and this leads to the adoption of ineffective ecosystem strategies in the financial industry. The purpose of the study is to develop an ecosystem strategy approach to digital financial services that takes into account the peculiarities of digital business ecosystems. The research methodology includes as follows: a review of existing approaches to modelling digital business ecosystems, identification of specific features of digital transformation of financial services that need to be taken into account when developing ecosystem strategies, development of a conceptual model for digital financial services, justification of the approach to forming ecosystem strategies for digital financial services. The solution proposed by the authors is based on a conceptual framework of developing ecosystem strategies for digital financial services. When building ecosystem strategies, we use the role model of participants in the digital business ecosystem and the conceptual model of the digital financial service, which reflects its principal structure, as well as the basic logic of its functioning. In developing the conceptual framework, the following features of digital transformation of financial services have been taken into account: changing the value proposition to include values into the network, developing innovative mobility, building value-oriented staff competencies and using digital trust.
The implementation of the proposed approach allows financial industry enterprises to make effective decisions on the formation of ecosystem strategies for digital financial services. The approach proposed by the authors is currently being tested in one of the largest brokerage companies in Russia, which is currently undertaking a digital transformation process. 1
In 2001, Paul Adler published an article entitled “Market, Hierarchy, and Trust: The
Knowledge Economy and the Future of Capitalism”, in which he predicted changes in
the basic principles of the economy by moving to-wards a networked form of
community / trust-based organisation that best provides incentives for knowledge
generation and dissemination, leading to faster innovation [
A Digital Business Ecosystem (DBE) is a concept that combines a notion of a business ecosystem, introduced by D. Moore, and a notion of a digital ecosystem, which reflects the technical infrastructure that connects computers and digital devices via Internet channels. This concept allows us to model the evolutionary and selforganizing behavior of economic entities in a distributed digital environment.
The expansion of the scale and diversity of the DBEs is one of the most important
manifestations of the ever-growing digital economy. Currently, all private individuals,
consumers, businesses, and organizations that have access to the Internet interact in
one way or another with a variety of DBEs. At the same time, new opportunities for
creating and developing businesses in various sectors of the economy are constantly
emerging [
One of the most dynamic sectors of the digital economy is digital financial services (DFS), which are an integral part of most digital business ecosystems. DFS brought to the market by FinTech enterprises and banks, interacting with each other and with many other digital services, generate complex digital products that carry higher value for end users than traditional products. For their realization of digital products, enterprises from the financial industry develop their ecosystem strategies (ES).
A significant number of scientific publications are devoted to the formation of strategies for enterprises' participation in the DBEs [3, 4, and 5]. Researchers offer different approaches for compiling ES and focus on the need for DBE modelling, but the proposed modelling approaches have often a generalized expression and do not take into account industry specifics. In particular, the issue of modelling DFS that take into account the features of DBEs is underdeveloped, which leads to the adoption of ineffective ES by financial institutions.
Therefore, there is a need for research into approaches to modeling DBEs for financial sector companies, which would allow them to develop ES, and that in our opinion implies solving the following research problems:
An insufficient research into approaches to modelling digital business ecosystems, which makes it difficult to determine the specifics of digital transformation of DFS;
A lack of knowledge about the features of digital transformation of financial services (FS), which makes it difficult to design a conceptual model of DFS;
Missing conceptual models for DFS, which make it difficult to develop an approach to forming ES for DFS;
A lack of development of approaches to the formation of ES for DFS, which leads to inefficient decisions by financial enterprises.
The purpose of the study is to develop an ES approach to DFS that takes into account the peculiarities of digital business ecosystems. The research methodology includes as follows: a review of existing approaches to modelling digital business ecosystems, identification of specific features of digital transformation of FS that need to be taken into account when developing ES, development of a conceptual model for DFS, justification of the approach to ecosystem strategies’ development for DFS. 2
Application of an ecosystem approach to modelling economic phenomena was
proposed by James Moore in 1993, who defined a business ecosystem as an economic
community of cooperating organisations consisting of producers, suppliers, customers
and other stakeholders who interact with each other to produce products of value to
consumers [
In 2002, a discussion paper written by a research group engaged in the introduction
of information and communication technologies into the activities of European small
and medium-sized enterprises conceived the concept of the DBE, reflecting “a
coevolution between the business ecosystem and its partial digital representation – the
digital ecosystem”. In 2007, this concept was theoretically justified [
A special feature of the DBEs is the absence of one-sided hierarchical control, as
well as the existence of suppliers of complementary products or services that are not
contractually linked but have significant interdependencies. At the same time,
researchers recognize that some degree of coordination have been carried out in
ecosystems by establishing basic requirements, standards, and interfaces that allow
achieving system-level goals defined by the “architect” of the DBEs [
Modularity and complementarity are specific features of the DBE architecture that
allow coordination without hierarchical control. Modularity is a decomposition of a
product into several independent subsystems that interact through clearly designed
interfaces. Complementarity is determined by the presence of complementors, which
provide complementary components for building complex innovative products with
high customer value [
It is the modularity that allows a number of different organisations to coordinate
activities without control from above, and it creates conditions for an ecosystem, and
also is a necessary but not sufficient prerequisite for its existence. Sufficiency is
determined by the presence of complementors which can, through interaction on the
basis of complementarity, form and monetize innovations that carry high value for all
participants in the DBEs. There are two types of complementarities: a unique one,
when complementors have unique complementary product elements that cannot exist
separately, and a supermodular one, where concerted joint investments by different
actors generate greater returns than in case of a separate use [
The issues of coordinating the interaction of partners within the DBEs are key
checkpoints in the process of its design. R. Adner identifies two approaches to DBE
modeling: an ecosystem membership-based one and a structural one [
The structural approach developed by R. Adner focuses on the creation of a value proposition and the relationship between partners in the process of its implementation. This approach has a strategic focus on building a complex product based on the interaction of a number of complementors, in which the coordinating organization does not have control over the participants and their actions. When building a value proposition, four main elements can be defined: the actions of participants to create a value proposition, the actors who perform these actions, the positions of participants that determine their functions in the value proposition, and the relationships between participants in the process of its implementation.
Most DBE modelling frameworks, such as BEAM, BOAT, and VISOR, focus on the focal enterprise, treating it as a platform. However, there are a number of studies that are based on a structural approach.
In the method of building for complex products in a strictly decentralized
ecosystem based on the structural approach developed by M. Radonjic-Simic and D.
Pfisterer, the following ecosystem modeling process is proposed: analysis of network
business scenarios, definition of goals and requirements, description of the four
above-mentioned elements of the DBEs, and creating of architectural drawings. The
IT architecture is based on the use of a peer-to-peer network and applications [
In the DBE TEAM architecture framework, which also uses a structural approach,
great importance is attached to the coordination of ecosystem participants. The
framework contains nine groups of questions in the “architecture” domain and three
groups of questions in the “coordination” domain, the answers to which allow you to
create an overview of the architecture. The need for such a design is explained by
the fact that there is no hierarchical control in the DBEs and coordination mechanisms
play an important role, which must be clearly defined in the process of forming a
value proposition. Groups of questions are placed on three architectural layers:
strategic, tactical, and technological [
The architectural approach to the DBEs allows you to develop robust strategies for
participation in the ecosystem. In seeking an ES, two types of competition should be
distinguished: internal competition for positions, positions and roles to distribute the
value within the ecosystem, and external competition with other DBEs to capture
value. The main difference between the enterprise strategy and the ES is that the first
one is aimed at finding a competitive advantage, and the second one is aimed at
finding reconcilement [
In the process of forming a strategy, it should be taken into account that all
complementors have their own interests and ES, as well as an understanding of the
structure of the DBEs and its risks [
A starting point for developing an ES is to choose the role that the company plans to play in the ecosystem. The role of an “architect” or “orchestrator” means that there are opportunities to coordinate partners within the ecosystem and to build competitive products in the target market. The complementor's role is a local one and requires unique capabilities that allow interaction within the ecosystem when building combined products. Both roles involve having a specific potential to operate in certain product markets, which should be taken into account when building an ES.
A development of an ES should also take into account the specific features of different industries, geographical areas and markets, i.e. the context in which the DBEs are immersed. 3
Financial services are understood as mechanisms for performing operations with
financial resources in the interests of clients, provided for by law, aimed at supporting
business operations, saving the real value of assets and extracting benefits. Such
transactions may include money transfers, lending, insurance, capital and pension
management, securities trading, etc. These operations are usually performed by
commercial banks, investment companies, and other businesses operating in the financial
markets. Historically, since the birth of modern banking in medieval Italy, it had
focused on supporting commercial transactions through the use of ever-evolving
financial instruments and has provided a level of confidence in the process of exchanging
values. With the ad-vent of the digital economy and the emergence of technologies
that enable digital trust to be maintained through blockchain technology and smart
contracts, the basic value proposition of banks – “implicit trust” - has been replaced
by “technically expressed trust”, which has raised the question not only of the
changing role of financial intermediaries, but also of the need for their existence [
As a result of the global financial crisis of 2008, when the extreme riskiness of the traditional banking business model, which allows transferring the main risks to taxpayers and depositors, was realized, the new FinTech financial industry began to be intensively formed, which was aimed at introducing innovations and reducing risks. Enterprises in this industry that operate in financial markets, using new business models based on digital technologies, began to provide serious competition to traditional participants, forcing them to transform. At the same time, the value proposition of traditional banks, based on stability, reliability and security, in modern conditions, when technologies provide trust and reduce the need for intermediaries, and enterprises are constantly looking for ways to introduce innovations, has become hopelessly out-dated.
It should be noted that in the conditions of digital transformation, the main
objectives of FS aimed at supporting commercial transactions remain the same; however,
there are significant changes in business models and business processes, which can be
seen by comparing the organization of FinTech companies and traditional participants
in financial markets [
The disintermediation process brought about by the capabilities of Internet
technologies means that participation in the supply chain depends on accurately
determining the contribution to value. Therefore, financial intermediaries who do not study the
supply chain and cannot provide evidence that they can add value to the customer will
be pushed out. At the same time, the increase in value involves not only delivering
services with lower costs, but also increasing the quality, speed, availability, as well
as improving any other factor that will be valuable from the customer's point of view
[
Building a value proposition that focuses on innovations that add value to the
customer involves building a customer-oriented organization. Companies operating in the
FS market can be divided into three groups by type of organization: value chain, value
shop, and value network [
Innovative mobility [
These features of the digital transformation of FS, related to the necessity of reorganizing and changing the value proposition to include value in the network, the development of innovative mobility, the formation of value-oriented competencies of personnel and the use of digital trust, should be taken into account when building ES. 4
M. Skilton defined a digital enterprise [
In order to develop strategies for including FS in the DBEs, financial organizations need to have a conceptual tool to determine which elements of the DFS business model and architecture should be changed. According to the authors, such a tool can be a conceptual model of the DFS, reflecting its principal structure, as well as the basic logic of functioning within the DBEs. The basic methodological approaches to building such a model are the concept of digital transformation of business models and design methods for digital enterprises. A conceptual model shall also take into consideration the specific features of the digital transformation of FS, which are to be determined by the requirement to ensure trust, as well as by the development of innovative mobility and value-oriented competencies.
The features of doing business in the DBEs associated with a high rate of change
determine the requirements for the structure of the digital business model, which
should allow you to adapt the business model to market dynamics. According to the
VISOR framework [
The architecture of a DFS, similar to that of a digital enterprise, is a combination of
the architecture of a financial organization and the DBE architecture. The architecture
of a financial organization, which includes the business architecture and IT
architecture, can be represented as a set of layers, such as the business role, application,
application platform, and communication infrastructure. The DBE architecture, in turn,
contains a description of 4 clusters: social, process, digital, and technological [
The listed components of the digital business model and the DFS architecture are reflected in the DFS conceptual model, which is shown in Figure 1. The central part of the conceptual model shows a FS using a digital platform that connects to the DBE via a digital interface. Software applications of the FS that allow us to realize financial opportunities ensure that operations for the exchange of values in the DBE can be performed in accordance with the needs of its participants. The interaction of the FS and the DBE through the interface implies embedding both in the chain of distribution of values in the ecosystem and in the process of generating confidence in the service. Trust for ecosystem interaction can be considered a fundamental factor that plays an important role in the communication of DBE participants.
Dashed lines on the DFS model reflect the key concepts of the digital business model listed above.
The DFS model is presented in the context of the enterprise's architectural layers in
accordance with the technical regulations of The Open Group's “Open Platform 3.0”.
These layers are reflected in the left part of the conceptual model. The right part of the
conceptual model reflects the architectural layers of the DBEs in the form of 4
clusters, justified in research made by M. Skilton [
The proposed conceptual model, which takes into account the features of the digital transformation of financial organizations, allows us to develop an approach to the formation of ecosystem DFS strategies. 5
The development of an ES should enable the implementation of a number of key business functions of the DFS:
1. Forecasting the needs of actors in financial transactions, regardless of the organizational and legal form of ecosystem participants. This have to be achieved by implementing predictive models that use available advanced technologies such as BigData, blockchain, and customer experience analysis from various sources.
2. Facilitation of value exchange processes between ecosystem participants, through the formation of effective communications in order to find and embed the most suitable participant in the value chain to ensure secure transaction processing. This allows us to provide and form the most profitable value chains.
3. Maintaining trust between all DBE participants to ensure transaction security and risk control. This can be implemented by technologies of technically expressed trust.
A framework involving two steps in developing a strategy can serve as a tool for building ES for DFS: choosing a target role in the DBEs and identifying key elements that require changes to achieve the selected role.
To select the target ecosystem role, it is proposed to use an organizational model of roles in the business ecosystem proposed by P. Weill and S. Woerner [16]. Figure 2 illustrates possible ES related to the transition to a particular role in DBEs.
These strategies are described in table 1. Forming a transition strategy for a role in a DBE involves the mandatory review of the role-specific elements of the DFS business model and architecture, which in turn leads to a development of solutions for the review of competencies in the DBE value chain. To develop a strategy, it is necessary to use the DFS conceptual model, which allows you to identify the key areas where the most significant changes occur during the implementation of a particular strategy. The table shows an example of the DFS key elements that must be transformed to implement various strategies in the DBEs.
The proposed framework for building ES, based on the use of the framework of organizational roles in the DBEs and the conceptual model of the DFS, allows financial enterprises to make effective decisions on the formation of DFS ecosystem strategies. 6
In the course of the study, the authors have found: 1) A development of the DFS ecosystem strategy, which im-plies a transition to the selected role in the DBE, should take into account the specific features of digital transformation of financial institutions; 2) specific features of the digital transformation of the DFS include: changes in the value proposition for inclusion in the network of values, development of innovative mobility, formation of value-oriented competencies of personnel and use of digital trust; 3) the DFS conceptual model proposed by the authors, which takes into account the features of the digital transformation of financial organizations, allows us to develop an approach to the formation of ecosystem DFS strategies. Based on this, the authors have developed a framework that allows enterprises and organizations in the financial sector to make effective decisions on the formation of DFS ecosystem strategies. The conceptual framework proposed by the authors is being test-ed at an enterprise in financial sphere.