Problems banking innovations and solutions
Isayeva
P.G.
Russia,
Dagestan State University
Banking is one of
the areas of human activity where the use of information and computer
technology, computer hardware and telecommunications is the most effective. A modern
bank should issue new attractive products and under growing competition to do
it quickly, with minimum risk and cost.
The range of
financial services is expanding every year and there always appear new types of
products and services on the market. This factor serves as the intensification of
competitive activity between credit institutions for each client. Therefore,
every bank builds its own relationship with the client based on the principles
of partnership.
Thus, the credit
institutions do not only care about saving, but also about the increase of capital
of their clients, and continuously offering new products and services that
contribute to the development of business activity of the population.
Nowadays one of
the major factors of successful banking activity is a policy of continuous
innovations. However, innovations in the banking business include not only
technical or technological development, but also implementation of new forms of
business, new methods of working in the market, new products and services, new
financial instruments that can provide economic growth.
The concept of
"innovation" first appeared in scientific research of culture experts
in the 19th century. Innovation was called the process of adaptation of a new
form of culture or adaptive norm of culture. Technical innovations were studied
only in the beginning of the 20th century.
In his work Balabanov
I.T. explains the concept of "banking innovation" and acts at the
premise that the banking innovation is a part of financial innovation
(innovation operating in the financial sector). Banking innovation is a resulting
effect of innovative operations of the bank carried out in the form of a new
banking product or transaction.
P. Semkova
defines banking innovation as follows: "Banking innovation is a resulting
effect of innovative operations of the bank carried out in the form of a new
banking product or transaction."
Thus, under innovation
in the field of banking activity should be understood the following:
• a product that was
singly developed by bank to meet the requirements of clients and that had not had
previously analogs in the market, is a new one;
• a product that is
already available in the range of banking services and that is used in one of
the markets, but developed to the other is also new for the market.
One example of
banking innovation is the so-called internet banking which has replaced the
e-banking and where the client connected with the bank by individual channel
using a computer and a modem and that allowed to carry out banking transactions
in real time. Internet banking is a system of receiving remote banking services
via Internet. Virtual communication with the bank is carried out on-line and through
the website of the bank. To operate with this system one must activate this
service in the office of a bank and have connection to Internet through a
compatible browser (a popular browser is Internet Explorer). Account management
is possible from anywhere and from any computer connected to Internet. Activation
and service activities as a rule are free in an online bank.
The main
advantages of online bank:
• complete
control of accounts and cards from anywhere where there is Internet access;
• the cost of
services is lower than in a bank, or is absent at all;
• instant performing
of most operations.
Obviously, the
development of globalization in the markets of banking services leads to a greater
competition in the banking markets; meanwhile the rate of implementation of innovations
in the banking sector still more aggravates the economic and technological
competition. An additional benefit for banks in the implementation of
innovative technologies is an activation of competition, improvement of the
quality of banking services, their diversification, and the possibility of a
significant increase in the volume of transactions.
The main
obstacles for the development of banking technologies and products are the lack
of support and the regulatory role of the state, and weak legislative base. There
are few laws in our country regulating the activities of banks on the
implementation and use of banking technology and the existing laws need to be
improved. For example, from the 1st of January 2010 there entered
into force the Federal Law of 03.06.2009 ¹ 103- of Federal Law "On the
activity of receiving payments from individuals carried out by paying agents."
This law defined the legal form of activity on payment for various goods and
services, but the conditions of this Law do not apply to legal entities and
individual entrepreneurs. Besides, this law has not settled the relations of
electronic payments that relates to such agents as Web Money and Yandex.Money.
Development and
implementation of new technologies is associated with high costs and not very
often these costs can be justified. During the crisis many banks reduced costs
in this direction and as a result they lost their niche in the market. In our
opinion, in times of crisis you can’t save on innovative technologies on any account,
because it is they that can help a bank to keep its market share and strengthen
its competitive advantage.
Psychological
problems are of great importance too. Many bank customers are interested in
serving through bank branches as well as in the use of an electronic interface.
This forces banks to carry additional costs both for keeping offices and the
systems themselves.
In our view, the
main directions for solution of these problems may serve:
- Improvement of domestic
legislation;
- Improvement of
financial literacy of the population;
- Improvement personnel
qualification and creation of competitive environment;
- Improvement of
financial stability of banks;
- Creation of
special reserves by banks for the development and implementation of innovative
technologies and products.
List of References
1. Zvarykina E.B.
Implementation of innovative banking technologies / / Finance and credit. -
2010. - ¹ 38 (422), pages. 47 - 49
2. Revenkov I.V.
Electronic banking: the risk of the bank's lack of direct contact with the
client / / Finance and credit. 2010. - ¹ 37 (421), pages. 27-30