Scientific and theoretical approach to the definition of banks' business model

Kovalenko Victoria
D.Sc. (Economics), Professor, Professor, Department of Banking, Odessa National University of Economics, Odesa, E-mail: kovalenko-6868@ukr.net, ORCID ID: https://orcid.org/0000-0003-2783-186X

Sergeeva Elena
PhD (Economics), Associate Professor, Odessa National University of Economics, Odessa, E-mail:lenasergeeva2007@ukr.net, ORCID ID: https://orcid.org/0000-0002-5523-3894

Ivanova Tatyana
Chief Specialist of the Legal Support Department of the Regional Branch of the State Property Fund of Ukraine in Odesa and Mykolaiv oblasts, Master's degree in 072 "Finance, Banking and Insurance", Odessa, E-mail:ivanova.tatyana004@gmail.com, ORCID ID: https://orcid.org/0000-0001-8635-0068

Cite this article:

Kovalenko V., Sergeeva E., Ivanova T. (2022) Scientific and theoretical approach to the definition of banks' business model. Ed.: V.V. Kovalenko (ed.-in-ch.) and others [Naukovo-teoretichnij pidhid do viznachennya biznes-modeli bankiv; za red.: V.V. Kovalenko (gol. red.)], Scientific Bulletin of the Odessa National Economic University (ISSN 2313-4569), Odessa National Economics University, Odessa, No. 1-2 (290-291), pp. 18-26.

Abstract

The purpose of this article is to to define business models based on cluster analysis for use in methods of assessing financial stability and stability. Approaches to the classification of business models of banks are considered, namely: by indicators of financial stability; by size of assets; by type of strategy; by areas of activity; based on historical experience and trends in international banking; according to the indicators of the SREP system; by structure of assets and liabilities, by form of ownership; by the level of equity, deposits, loans, interbank loans; based on two criteria, such as the types of customers and the range of products offered. The methodological basis is the use of methods of scientific knowledge, cluster and comparative analysis, generalization. With the help of the developed system of symptom factors, the banks of Ukraine were clustered in order to identify existing business models. Quantitative measurement to determine market segments, used 7 indicators to form clusters. These include: interbank loans (in% of assets), funds of other banks (in% of assets); loans to legal entities (in% of assets); deposits of legal entities (in% of assets), loans to individuals (in% of assets), deposits of individuals (in% of assets), investment portfolio (in% of assets). According to the results of cluster analysis, three business models of banks were formed, namely narrowly oriented investment banks; diversified banks and corporate banks. Graphically depicts and describes the migration of banks according to their business models. It is established that business models formed in the process of digitalization need further research; determining the optimal business model, characterized by financially sustainable development with an adequate level of risk and taking into account the interests of all stakeholders.

Keywords

bank, business model, types of business models of banks, cluster, financial stability model.

JEL classification: E580, G210, C510; DOI: 10.32680/2409-9260-2022-1-2-290-291-18-26

UD classification: 336.201.2:336.01

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