Problemi Ekonomiki (Mar 2020)
Prospects and Risks of the Fintech Initiatives in a Global Banking Industry
Abstract
The aim of the study is to outline the main trends, problems, and risks that should be addressed through cooperation between fintech companies and banks at the current stage of international financial market development. The analysis of the current situation in the financial market shows that innovative technologies play a key role in the development of banking and financial services in the world. The problems of the flexibility of traditional financial institutions do not coincide with the ever-growing needs of clients to receive the highest quality, cheap and fast financial services. Technology-driven companies continue to develop the digital innovation field, which has generated considerable interest in its implementation in banking and finance. The article describes the main reasons for the partnerships between banks and fintech companies, the motives and trends of investing in fintech development, the main stages of preparation for partnership and the area of highest interest for implementation of innovations by international banks. An applied aspect of this article is the analysis of the practical experience and forms of successful cooperation between banks and fintech companies in different countries of the world. The research results highlight the main stages of preparation for international banks’ cooperation with fintech companies, as well as the most popular products and services to enhance effective integration between them. Based on the results obtained, measures to strengthen cooperation between banks and fintech companies are justified, which will make the process of satisfying financial services consumers more rapid, simple, accessible, and efficient. The authors identify the major challenges and risks facing the Ukrainian аintech market, including the legal and regulatory environment, slow adoption of innovations by traditional banks, lack of open APIs in the banking sector, limited access to capital and financing for fintechs, etc. A prospect of further research in this area is to substantiate common and distinct approaches to regulating activities of fintech companies in different countries around the world, including capitalization and financial risk management requirements, as well as KYC (Know Your Customer Identification) procedures in customer service. The further development of the fintech industry is significantly transforming the business models of international banks and could lead to the replacement of classic forms of banknotes
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