Digest Finance

Regional Banks & FinTech: A Standoff or Partnership?

Vol. 24, Iss. 1, MARCH 2019

PDF  Article PDF Version

Received: 16 October 2018

Received in revised form: 31 October 2018

Accepted: 14 November 2018

Available online: 29 March 2019

Subject Heading: Banking

JEL Classification: G12

Pages: 13-20


Zver'kova T.N. Orenburg State University, Orenburg, Russian Federation


Subject The rise of innovative financial technology and blockchain intensified debates about refocusing the financial market’s needs and FinTechs substituting traditional banks. The competition for clients moved to the digital level. Traditional banks are forecasted to step down gradually. Major banks announced changes in their business models to establish the partnership relations with fintech companies and surround themselves with the ecosystem of services. However, Russia has still been waiting for the technological boom. Considering limited financial resources, regional banks need to look for new aspects for cooperating with fintech companies.
Objectives The research analyzed the existing situation in the banking market in terms of the competition of credit institutions with fintech companies. I study what opportunities regional banks have to reshape their business models and set partnership relations with fintech companies.
Methods The research relies upon methods of expert assessment and generalization.
Results Currently, regional banks have no financial resources and technological capabilities to compete with fintech companies. The cooperation strategy may help them survive in the situation.
Conclusions and Relevance Regional banks should not stick to each aspect of FinTech development, but rather focus on the expansion and customization of the customer services, delivery of tailor-made solutions and recommendations through various communication means.

Keywords: regional bank, financial technology, FinTech


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