FINTECH IN BANKING BUSINESS: FEATURES OF DEVELOPMENT AND POTENTIAL OPPORTUNITIES
Abstract
The study assesses the current state of fintech development of the global banking business, analyses the level of penetration of FinTech services into foreign markets and identifies trends in modern global investment in fintech companies. The banking FinTech-market of Ukraine is monitored and its main segments, in which domestic banks operate are identified. Fintech products of cooperation of Ukrainian banks and fintech companies are characterised. The main factors that contributed to the emergence and development of FinTech are considered. Those factors are unique to Ukraine and they include development of technology and innovation, the improvement to the legal and regulatory environment, access to the capital market, the search for alternative ways of financing the banking business, qualification. It is established that successful and promising areas of the banking business development in Ukraine are artificial intelligence, open banking, blockchain and digital banking. In order to identify prospects for further promotion of the banking business, a SWOT analysis of the digital banking development in Ukraine is conducted. The adaptation scheme of introducing fintech-innovations into banking is also formed; the peculiarities of the procedure of developing banking innovative products and services are described. The main advantages of integrating fintech solutions into banking services are identified and the potential opportunities for the banking business development in the fintech market of Ukraine are outlined. These include the development of a cashless economy, an increase in the level of digital and financial literacy of consumers and businesses, the development of investment potential and an increase in the degree of FinTech development, the integration of the Ukrainian FinTech ecosystem into the global financial space, further development of the digital infrastructure of the financial market. The important role of the National Bank of Ukraine in the development of financial technologies and cooperation of commercial banks and fintech companies is highlighted. The results of analysing the impact of fintech on the banking sector helped to predict scenarios for creating innovative products and services for customers based on fintech solutions. It is established that the implementation of the developed measures is aimed at achieving long-term strategic goals of the bank development related to the introduction of innovative methods of work, new banking products and services for increasing and expanding the customer base, increasing its competitiveness and efficiency, commercialising modern accumulated knowledge, technologies and equipment. Further research will be aimed at an in-depth study of certain areas of cooperation between fintech and banking.
References
Осиповського А.В., Михайлин А.В. Розвиток фінансових технологій в сфері банківських послуг: основні напрямки. Молодий вчений. 2017. № 26 (160). С. 124–127. (дата звернення: 15.12.2021).
Global FinTech Adoption Index 2019. Ernst & Young. URL: https://asdteam.com/blog/global-fintech-adoption-index-2019-report-highlights. (дата звернення: 13.12.2021).
Pulse of FinTech H2'20. February 2021. KPMG. URL: https://assets.kpmg/content/dam/kpmg/xx/pdf/2021/02/pulse-of-fintech-h2-2020.pdf. (дата звернення: 15.12.2021).
Банки та фінтех-компанії: сила – в єдності (2020). Фінансовий пульс. URL: finpuls.com/upload/docs/news/banking/reviews/ Банки%20та%20фінтех-компанії.pdf. (дата звернення: 12.12.2021).
Каталог фінтех-компаній України 2020 (2020) Українська асоціація фінтех та інноваційних компаній. URL: https://fintechua.org/market-map (дата звернення: 20.12.2021).
The BAI Global Innovation Awards. Bank Administration Institute. URL: https://www.bai.org/globalinnovations/awards/categories (дата звернення: 20.12.2021).
Number of Fintech startups worldwide from 2018 to 2020, by region. Statista. URL: https://www.statista.com/statistics/893954/number-fintech-startups-by-region. (дата звернення: 20.12.2021).
World Fintech Report 2019 Capgemini. URL: https://www.capgemini.com/es-es/wp-content/uploads/sites/16/2019/06/World-FinTech-Report-WFTR-2019_Web.pdf. (дата звернення: 20.12.2021).
Open Banking could be worth £18bn a year to UK consumers and SMEs. Finextra. URL: https://www.finextra.com/newsarticle/34029/open-banking-could-be-worth-18bn-a-year-to-uk-consumers-and-smes-report (дата звернення: 20.12.2021).
FS industry ready to shift from Open Banking to «Open X». Finextra. URL: https://www.finextra.com/newsarticle/33935/fs-industry-ready-to-shift-from-open-banking-to-open-x. (дата звернення: 20.12.2021).
Опитування українських банків та фінтех-компаній – 2019. USAID FST Activity (2019) URL: http://www.fst-ua.info/wp-content/uploads/2019/12/FinTech-Survey-Report_UKR_12-12-2019.pdf (дата звернення: 20.12.2021).
Особливості фінтеха в Україні: проблеми і перспективи. URL: http://ipkey.com.ua/uk/partners-6/1178-osobennosti-finteha-v-ukraine-problemy-i perspektivy.html. (дата звернення: 20.12.2021).
Банки та фінтех-компанії: чи очікується перерозподіл ринку (2020). Фінансовий пульс. URL: http://finpuls.com/ua/financial/reviews/news/Banki-ta-fnteh-kompan-chi-ochkutsya-pererozpodl-rinku.htm (дата звернення: 20.12.2021).
Стратегія розвитку фінтеху в Україні до 2025 року.тURL: https://bank.gov.ua/ua/news/all/strategiya-rozvitku-fintehu-v-ukrayini-do-2025-roku. (дата звернення: 20.12.2021).
Autonomous Research. URL: https://www.autonomous.com (дата звернення: 20.12.2021).
Чат-бот / Бізнес Консьєрж-сервіс (2020). URL: https://raiffeisen.ua/ru/biznesu/onlajn-servisy/chat-bot-business-concierge-service (дата звернення: 20.12.2021).
Офіційний сайт Національного банку України. URL: https://bank.gov.ua (дата звернення: 20.12.2021).
Fintech Trends that will Transform Banking and Financial Services in 2019, Perfectial. URL: https://perfectial.com/blog/fintech-trends-2019 (дата звернення: 15.12.2021).
Branches in decline: last one out, turn off the lights. URL: https://thefinancialbrand.com/66228/bank-credit-union-branch-traffic (дата звернення: 15.12.2021).
Digital Banking Users to Reach 3,6 Billion by 2024, an Increase of 50%. URL: https://technologymirror.com.ng/digital-ban-king-users-to-reach-3-6-billion-by-2024-an-increase-of-54 (дата звернення: 20.12.2021).
Chikova D., Kent S., Freddi R. European Retail Banking Radar 2019. URL: https://www.kearney.com/financial-services/article?/a/european-retail-banking-radar-2019 (дата звернення: 20.12.2021).
Українські необанки: ключові гравці й потенційні ніші для розвитку. URL: https://elnews.com.ua/uk/ukrayinski-neobanky-klyuchovi-gravczi-j-potenczijni-nishi-dlya-rozvytku (дата звернення: 10.12.2021).
Про банки і банківську діяльність : Закон України від 7.12.2000 р. № 2121-III. Верховна Рада України. URL: https://zakon.rada.gov.ua/laws/show/2121-14 (дата звернення: 15.11.2021).
Про платіжні системи та переказ коштів в Україні : Закон України від 5.04.2001 р. № 2346-III. / Верховна Рада України. URL: https://zakon.rada.gov.ua/laws/show/2346-14 (дата звернення: 15.11.2021).
Зрозуміти та відпустити: причини та результати «великого банківського очищення» (2020). Офіційний сайт Національного банку України. URL: http://badbanks.bank.gov.ua (дата звернення: 30.11.2021).
The Global Innovation Index 2020. URL: https://www.global innovationindex.org/gii-full-report-2020.pdf (дата звернення: 20.12.2021).
Андреєва А. Кібербезпека: названі основні ризики для банків. URL: https://finance.liga.net/bank/novosti/kiberbezopasnost-nazvany-glavnye-riski-dlya-bankov (дата звернення: 10.12.2021).
Пісарев А. У яких банків немає мобільних додатків? URL: https://minfin.com.ua/2019/10/18/39314319 (дата звернення: 10.12.2021).
World Digital Competitiveness Ranking. URL: https://www.imd.org/centers/world-competitiveness-center/rankings/world-competitiveness (дата звернення: 20.12.2021).
The ICT Development Index (IDI). URL: https://read.itu-ilibrary.org/science-and-technology/measuring-he-information-society-report-2017_pub/80f52533-e54ede5f-en#page1 (дата звернення: 20.12.2021).
Корнівська В.О. Цифровий банкінг: ризики фінансової дигіталізації. Проблеми економіки. 2017. № 3. С. 254–261.
У 37% українців немає банківських рахунків Mastersard. Minfin [Ministry of Finance]. URL: https://minfin.com.ua/2020/02/28/41210909 (дата звернення: 15.12.2021).
Auer R., Cornelli G. Frost J. Covid-19: cash and the future of payments. URL: https://www.bis.org/publ/bisbull03.pdf (дата звернення: 15.12.2021).
Рубанов П.М. FinTech інновації як детермінанти розвитку національної економіки. URL: https://essuir.sumdu.edu.ua/bitstream-download/123456789/79260/1/diss_Rubanov.pdf (дата звернення: 30.11.2021).
Osipovskaya, A.V., Mikhailin, A.V. (2017) Rozvytok finansovykh tekhnolohij v sferi bankivs'kykh posluh: osnovni napriamky [Development of financial technologies in the sphere of banking services: main directions]. Young scientist, 26, 124–127. (аccessed: 15 December 2021).
Ernst & Young (2019), «Global FinTech Adoption Index 2019», available at: https://asdteam.com/blog/global-fintech-adoption-index-2019-report-highlights (accessed: 13 December 2021).
KPMG (2021), “Pulse of FinTech H2'20. February 2021”, available at: https://assets.kpmg/content/dam/kpmg/xx/pdf/2021/02/pulse-of-fintech-h2-2020.pdf. (accessed: 15 December 2021).
Finpuls (2021), Banky ta fintekh-kompanii: syla – v iednosti. [Banks and FinTech companies: strength in unity], available at: finpuls.com/upload/docs/news/banking/reviews.pdf. (accessed: 12 December 2021).
“Kataloh fintekh-kompanii Ukrainy 2020“ (2020), [Catalog of Fintech
Companies of Ukraine 2020], available at: https://fintechua.org/market-map (accessed: 12 December 2021).
Bank Administration Institute (2020), “The BAI Global Innovation Awards”, available at: https://www.bai.org/globalinnovations/awards/categories (accessed: 20 December 2021).
Statista (2020), “Number of Fintech startups worldwide from 2018 to 2020, by region”, available at: https://www.statista.com/statistics/893954/number-fintech-startups-by-region (accessed: 20 December 2021).
Capgemini (2019), “World Fintech Report”, available at: https://www.capgemini.com/es-es/wp-content/uploads/sites/16/2019/06/World-FinTech-Report-WFTR-2019_Web.pdf (accessed: 20 December 2021).
Finextra (2019), “Open Banking could be worth £18bn a year to UK consumers and SMEs”, available at: https://www.finextra.com/newsarticle/34029/open-banking-could-be-worth-18bn-a-year-to-uk-consumers-and-smes-report (accessed: 20 December 2021).
Finextra (2019), “FS industry ready to shift from Open Banking to “Open X””, available at: https://www.finextra.com/newsarticle/33935/fs-industry-ready-to-shift-from-open-banking-to-open-x (accessed: 20 December 2021).
USAID FST Activity (2019), Opytuvannia ukrains'kykh bankiv ta fintekh-kompanij – 2019 [Survey of Ukrainian banks and FinTech companies], available at: http://www.fst-ua.info/wp-content/uploads/2019/12/FinTech-Survey-Report_UKR_12-12-2019.pdf (accessed: 20 December 2021).
Ipkey (2020), Osoblyvosti fintekha v Ukrayini: problemy i perspektyvy [Features of FinTech in Ukraine: problems and prospects], available at: http://ipkey.com.ua/uk/partners-6/1178-osobennosti-finteha-v-ukraine-problemy-i perspektivy.html (accessed: 20 December 2021).
Finpuls (2021), Banky ta fintekh-kompanii: chyochikuiet'sia pererozpodil rynku. [Banks and FinTech companies: is market redistribution expected?], available at: finpuls.com/upload/docs/news/banking/reviews.pdf (accessed: 20 December 2021).
National Bank of Ukraine (2020), “Strategy of Ukrainian Financial sector development until 2025”, available at: https://bank.gov.ua/ua/news/all/strategiya-rozvitku-fintehu-v-ukrayini-do-2025-roku (accessed: 20 December 2021).
Autonomous Research (2020). Official web-site. аvailable at: https://www.autonomous.com (accessed: 20 December 2021).
ChatBot / Business Concierge Service (2020), available at: https://raiffeisen.ua/ru/biznesu/onlajn-servisy/chat-bot-business-concierge-service (accessed: 20 December 2021).
National Bank of Ukraine (2020). Official web-site. Available at: https://bank.gov.ua/ (accessed: 20 December 2021).
Perfectial (2019), “Fintech Trends that will Transform Banking and Financial Services in 2019”, available at: https://perfectial.com/blog/fintech-trends-2019 (accessed: 15 December 2021).
The Financial Brand (2021). Branches in decline: last one out, turn off the lights. аvailable at: https://thefinancialbrand.com/66228/bank-credit-union-branch-traffic (accessed: 15 December 2021).
Digital Banking Users to Reach 3,6 Billion by 2024, an Increase of 50%. аvailable at: https://technologymirror.com.ng/digital-ban-king-users-to-reach-3-6-billion-by-2024-an-increase-of-54 (accessed: 20 December 2021).
Chikova D., Kent S., Freddi R. (2019). European Retail Banking Radar. Available at: https://www.kearney.com/financial-services/article?/a/european-retail-banking-radar-2019 (accessed: 20 December 2021).
Elnews (2021) Ukrayinsʹki neobanky: klyuchovi hravtsi y potentsiyni nishi dlya rozvytku [Ukrainian neobanks: key players and potential niches for development], available at: https://elnews.com.ua/uk/ukrayinski-neobanky-klyuchovi-gravczi-j-potenczijni-nishi-dlya-rozvytku (accessed: 10 December 2021).
Pro banky i bankivsjku dijaljnistj [About banks and banking]: Ukraine’s Law 07.12.2000 № 2121-III. Available at: https://zakon.rada.gov.ua/laws/show/2121-14 (accessed: 15 November 2021).
Pro platizhni systemy ta perekaz ghroshej v Ukrayini [On payment systems and money transfer in Ukraine]: Ukraine’s Law 05.04.2001 № 2346-III. Available at: https://zakon.rada.gov.ua/laws/show/2346-14 (accessed: 15 November 2021).
Zrozumity ta vidpustyty: Prychyny i rezuljtaty «velykogho bankivsjkogho ochyshhennja» [Understand and Release: The Causes and Results of the «Great Bank Cleanup»]. Official web-site of the National Bank of Ukraine]. Available at: http://badbanks.bank.gov.ua (accessed 30 November 2021).
The Global Innovation Index 2020. Available at: https://www.globalinnovationindex.org/gii-full-report-2020.pdf (accessed: 20 December 2021).
Andreeva A. (2021) Kiberbezopasnost': Nazvany glavnye riski dlya bankov [Cybersecurity: The main risks for banks are identified]. Available at: https://finance.liga.net/bank/novosti/kiberbezopasnost-nazvany-glavnye-riski-dlya-bankov (accessed 10 December 2021).
Pisarev A. U yakykh bankiv nemaye mobilʹnykh dodatkiv? [Which banks don’t have mobile applications]. Available at: https://minfin.com.ua/2019/10/18/39314319 (accessed 10 December 2021).
World Digital Competitiveness Ranking. Available at: https://www.imd.org/centers/world-competitiveness-center/rankings/world-competitiveness (accessed 20 December 2021).
The ICT Development Index (IDI). Available at: https://read.itu-ilibrary.org/science-and-technology/measuring-he-information-society-report-2017_pub/80f52533-e54ede5f-en#page1 (accessed 20 December 2021).
Kornivsjka V.O. (2017) Cyfrovyj bankingh: ryzyky finansovoji dyghitalizaciji [Digital banking: risks of financial digitalization]. Problemy ekonomiky, Vol. 3, pp. 254–261.
U 37% ukraintsev net bankovskikh schetov Mastersard [37% of Ukrainians don’t have bank accounts – Mastercard]. Minfin [Ministry of Finance]. Available at: https://minfin.com.ua/ 2020/02/28/41210909 (accessed 15 December 2021).
Auer R., Cornelli G. Frost J. Covid-19: cash and the future of payments. Available at: https://www.bis.org/publ/bisbull03.pdf (accessed 15 December 2021).
Rubanov P.M. (2020) FinTech innovations as determinants of national economy development. Available at: https://essuir.sumdu.edu.ua/bitstream-download/123456789/79260/1/diss_Rubanov.pdf (accessed 30 November 2021).
