The Impact of Digitalization on the Development of Securities Exchange Trading

Abstract

The article examines the impact of digitalization on the development of securities exchange trading in Ukraine and Eastern European countries. The key technological trends transforming stock markets are analyzed: algorithmic trading, blockchain technologies, artificial intelligence, open APIs, and cloud solutions. Based on comparative analysis, a direct correlation between the level of digitalization of exchange infrastructure and securities market development indicators has been established. A significant lag in the Ukrainian stock market’s digitalization level compared to Eastern European countries has been identified. In particular, the share of algorithmic trading in Ukraine is only 10% compared to 52% in Poland and 38% in the Czech Republic, while market capitalization is 2% of GDP compared to 28% in Poland. The key issues hindering the digital transformation of securities trading in Ukraine have been determined: imperfect regulatory framework, technological backwardness of infrastructure, market fragmentation, limited access to investments, and insufficient level of digital competencies. A SWOT analysis was conducted, based on which strategic directions for the digitalization of securities trading in Ukraine were formulated: creating a favorable regulatory environment through the implementation of regulatory "sandboxes"; consolidation of exchange infrastructure and creation of a unified trading platform; development of technological competencies of market participants; international integration through the implementation of international standards; and creation of an innovative ecosystem for the development of fintech solutions. It has been proven that the implementation of successful experiences from Eastern European countries, taking into account national characteristics, will accelerate the digital transformation of the Ukrainian stock market, increase its competitiveness, and integration into global capital markets. It has been determined that the key factor for successful digitalization is ensuring a balance between stimulating innovation and maintaining financial stability, which requires coordinated efforts from regulators, market participants, and technology companies.