Retail banking: essence and development trends under the financial technologies impact

Zherdetska Liliia
D.Sc. (Economics), Associate Professor, Head of the Banking Department, Odessa National Economic University, Odesa, Ukraine, e-mail: lzherdetska@gmail.com

Klimashevska Olena
P4th year student of the Faculty of Finance and Banking, Odessa National University of Economics, Odessa, Ukraine, e-mail: klimashevskaya.h@gmail.com

Cite this article:

Zherdetska L., Klimashevska O. Retail banking: essence and development trends under the financial technologies impact. Scientific Bulletin of the Odessa National Economic University. 2021. № 3-4 (280-281). pp. 35-43.

Abstract

Introduction. Retail banking is an important factor in the capitalization of household savings and their transformation into investment. Considering above mentioned, the study of the theoretical foundations of the retail business is relevant and timely. In modern conditions, the issues of development of retail banking under the influence of digitalization and financial technologies become especially important. Purpose. The purpose of the study is to substantiate of prospects of development of retail business of banks of Ukraine in the conditions of development of financial technologies. Achieving the goal involves setting and solving the following tasks: analysis of trends in the retail business of Ukrainian banks and financial technologies, assessment of the impact of financial technologies on promising areas of banks in the retail market segment. Results. In the article, it is established, that retail banking is services for individual customers who need a certain set of standardized products. According to the results of the analysis, it is proved that the leaders of the retail segment are banks, which are considered to be the most innovative and actively introduce financial technologies in customer service, including and retail business. This identifies the determination of the content of financial technologies and the characteristics of FinTech firms competing with banks in the retail business segment. The necessity of cooperation of banks and fintech firms in the market of banking services has been proved. Conclusions. Today in the field of banking, including and retail, for traditional banks an additional competitive threat is the activities of FinTech firms, which are more flexible due to their small size and relative unregulated activities. For retail banking customers, this will mean greater availability and ease of use of services. However, this will require banks to, firstly, incur additional costs for the introduction of the latest technologies and services; secondly, finding ways to cooperate with FinTech firms in order to maintain existing and create new competitive advantages.

Keywords

retail banking, competition, financial technology, fintech firms.

JEL classification: G210

УДК: 336.717

References

1. Law of Ukraine «On Banks and Banking» of December 7, 2000 № 2121-ІІІ. URL: http:// zakon.rada.gov.ua/cgi-bin/laws/main.cgi?nreg=2121-14 [in Ukrainian].
2. Ivasiv, I.B. (2003). Universal banking: risks and benefits. Scientific notes: scientific collection of KNEU. Vip. 5 / Ed .: A.F. Pavlenko. Kiev. [in Ukrainian].
3. Commissarсhyk, O.V. (2010). Theoretical aspects of retail banking. Finance, accounting and auditing, 15, 75–83. [in Ukrainian].
4. Vilshanska, M.M., Sorokivska, Z.K. (2016). Retail banking: theoretical provisions and practical implementation strategy. Young Science, 25, 75-85
5. Kuznyetsova, A., Kozmuk, N., Zherebylo, I., Sydorova, O., & Zvarych, M. (2018). The Essence of Retail and Development of Retail Banking Innovative Mechanisms in Ukraine. Marketing and Management of Innovations, 4, 316-331. http://doi.org/10.21272/mmi.2018.4-27
6. Peter, F. Drucker (2020).. Challenges for 21st century management. «KM-Books».
7. Main performance indicators of Ukrainian banks. Retrieved from : https://bank.gov.ua/ua/ statistic/supervision-statist/data-supervision#1 [in Ukrainian].
8. Toronto Leadership Centre. FinTech, RegTech and SupTech: What They Mean for Financial Supervision. Retrieved from http://res.torontocentre.org/guidedocs/FinTech%20RegTech%20 and%20SupTech%20-%20What%20They%20 Mean%20for%20Financial%20Supervision.pdf (access date 23.03.2021).
9. Onishchenko, Y.I. (2018). Banking in the development of digital technologies. Bulletin of ONU named after II Mechnikov. 23, 8 (73), 160-164. [in Ukrainian].
10. Banking on Disruption: Digitization, FinTech and the future of retail banking. (June 2017). Retrieved from https://www.tcs.com/content/dam/tcs/pdf/Industries/Banking%20and%20 Financial%20Services/future-retail-banking-0617-1.pdf .