Subject The article reviews the modern banking, considering challenges it faces due to the emergence of digital economy worldwide. I also focus on aspects that significantly transform in banking, and study avenues of its further development given the growing competition of technological companies. Objectives The research provides the rationale for organizational and technological priorities in the development of the Russian banking and determines whether it is possible to maintain and improve the quality of banking. Methods The research relies upon general scientific methods, systems approach, statistical and comparative analysis, expert assessment, summaries, logic and functional analyses. Results The article justifies the certainty of organizational and technological priorities set to transform the Russian banking system due to the diffusion of banking and non-banking operations in financial relationships. The primary substance of banking should be preserved so that the technocratic approach could be overwhelmed, resulting from the intensive technological digitization. Conclusions and Relevance Despite the effectiveness of new digital technologies, the banking process is not stepping down, but rather diffuses with such technologies. The development of core banking will have an ever increasing systemic significance. In the new environment of financial relationships, banks should keep their competitive advantages. It is important for banks not only turn into fintechs, but also make use of their expansion and enhancement. The findings can be used to develop and formulate new principles for banking development given its global digitization.
Keywords: bank, banking system, banking, digitization, financial technology
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