THE INFLUENCE OF NEOBANKS AND FINTECH COMPANIES ON THE ACTIVITIES OF TRADITIONAL BANKS

Abstract

The purpose of the article is to determine the influence of the activities of neobanks and fintech companies on the effectiveness of the functioning of traditional banks and the formation of directions for increasing their competitiveness. Methodology of research. The goal set in the article was achieved using logical and systematic approaches, general scientific methods of analysis and synthesis of empirical data, comparative analysis. Findings. It is emphasized that the vast majority of Internet banks work in narrow customer and operational niches, fintech companies use some banking operations as a tool to promote the sale of products of their specialized business. Features of the service provided by non-banks to clients are as follows: most neobanks seek to serve that part of the market that is not provided or insufficiently covered by the services of traditional banks, or specializes in the sale of one product; work with low-profit client groups forces, and the absence of branches, a high level of process automation and concentration on a small product line allows non-banks to ensure a low cost of operations. The size of banking operations performed by fintech companies or small credit institutions associated with them is not significant compared to the volume of the entire banking service of traditional banks, but these are mass client segments. It has been proven that the banking operations carried out by the named institutions do not pose a critical threat to traditional banks, but force traditional banks to more actively implement digitalization in their activities in order to increase price and product competitiveness in relation to digital competitors. It was concluded that in the process of digitalization of economic activity, organizations from different industries do not compete with each other in some areas, but rather use their tools to improve the efficiency of the work of both the organizations themselves and their customers. Practical value. The results of the research can be used by financial market participants to improve the efficiency of banking institutions.