THEORETICAL FOUNDATIONS FOR THE DEVELOPMENT OF DIGITAL FINANCIAL INSTRUMENTS IN PRIVATE WEALTH MANAGEMENT
Abstract
The rapid digitalization of the financial sector has fundamentally transformed, and continues to transform, the way private capital is formed and managed, introducing new instruments and requiring a coherent ecosystem for their effective use. This creates a scientific and practical problem of overcoming the fragmentation of contemporary digital instruments for private wealth management. Addressing this problem defines the purpose of the study as substantiating the theoretical foundations for the development of digital private wealth management. The research objective is achieved through the use of systems analysis, conceptual modeling, and the Domain-Driven Design (DDD) methodology. The conceptualization of the domain is implemented through the development of a holistic model of digital private wealth management that synthesizes behavioral, values-based, and distributed-ledger-technology-based instruments. The behavioral model replaces static questionnaires with a dynamic behavioral profile that can identify and mitigate an investor’s cognitive biases in real time. The values-based model translates the client’s subjective non-financial goals into quantifiable filters for multi-criteria portfolio optimization. The tokenization model describes the process of transforming illiquid real assets into fractional digital security tokens using a blockchain platform and smart contracts. The integration model, implemented through an artificial intelligence-driven simulation engine, links the private investor’s long-term life goals with the current state of the portfolio and provides automated responses to triggers, such as life events and market volatility. The scientific novelty of the study lies in synthesizing these four models into a coherent domain ontology for organizing private wealth management. This ontology captures the consolidation of digital instruments required to implement hyper-personalized wealth management, while simultaneously taking into account the private investor’s behavioral and cognitive preferences, personal values, and life plans.
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