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Classic banking: directions of transformation in terms of the technological revolution

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Article(UKR)(.pdf)

The article considers the influence of financial technology companies’ development on the classical banking business. The tech lagging of the financial sector in respect to innovations applied has been noted (in comparison with other industries), as well as the significant growth in recent years of venture investments in financial technologies.

FinTech companies are especially active in the payments and e-wallets segment, where the drivers of the changes are large equipment manufacturers and global technology companies – Apple, Samsung, Google, Amazon. Much of the investment is directed to the development of P2P payments (person-to-person) and start-ups related to social networks and instant messaging services. Part of the projects focuses specifically on the analysis of behavioral information of social networks users, used to score their solvency and risk assessment in lending.

It is noted that regulatory constraints will deter the scaling of FinTech companies to the level of full-fledged banks, but there is an increase in the risk of banks losing market positions in services, especially in the front end of the service process, which is the direct interaction with the client.

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