Asset Management as a Digital Platform Industry: A Global Financial Network Perspective

38 Pages Posted: 13 Dec 2018

See all articles by Daniel Haberly

Daniel Haberly

University of Sussex

Duncan MacDonald-Korth

University of Oxford

Michael Urban

University of Oxford

Dariusz Wojcik

University of Oxford, St. Peter's College

Date Written: November 21, 2018

Abstract

While contemporary technological disruption is increasingly conceptualized in terms of the logic and paradoxes of the digital platform economy, discussions of “FinTech” have only engaged to a limited extent with these debates — particularly from an economic geographic standpoint. Here we fill this gap by proposing a new framework for conceptualizing the organizational and geographic logic of the digital platform economy in finance, and applying this framework to an examination of the impact of the digital platform model on asset management. As we will show, asset management is being profoundly disrupted by the rise of what we dub digital asset management platforms — or DAMPs — which encompass services including index fund and ETF provision, robo-advising, and third-party analytics and trading support. Like other digital platforms, DAMPs do not so much leverage technology to enhance their competitiveness within markets, as to radically restructure the market itself. Also like other platforms, their rise has produced a winner-take-all paradox of centralization through democratization that defies predictions of technology-enabled industry decentralization. However, the logic and implications of the rise of DAMPs diverges, in other respects, from non-financial digital platforms, with DAMPs 1) tending to asymmetrically disrupt different dimensions of market “efficiency,” 2) generally being less suited to regulatory arbitrage than tools already at the disposal of financial firms, and 3) mostly reinforcing rather than challenging the position of incumbent asset management firms and centers. Ironically, this divergence appears to reflect the extent to which finance has always possessed key characteristics of the digital platform economy.

Keywords: Asset Management, Digital Platform Economy, Fintech, Global Financial Networks

JEL Classification: D43, G14, G23, G28, O33

Suggested Citation

Haberly, Daniel and MacDonald-Korth, Duncan and Urban, Michael and Wojcik, Dariusz, Asset Management as a Digital Platform Industry: A Global Financial Network Perspective (November 21, 2018). Available at SSRN: https://ssrn.com/abstract= or http://dx.doi.org/10.2139/ssrn.3288514

Daniel Haberly (Contact Author)

University of Sussex ( email )

Sussex House
Falmer
Brighton, Sussex BNI 9RH
United Kingdom

Duncan MacDonald-Korth

University of Oxford ( email )

Mansfield Road
Oxford, Oxfordshire OX1 4AU
United Kingdom

Michael Urban

University of Oxford ( email )

Mansfield Road
Oxford, Oxfordshire OX1 4AU
United Kingdom

Dariusz Wojcik

University of Oxford, St. Peter's College ( email )

New Inn Hall Street
Oxford, OX1 2DL
United Kingdom

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