MODERN BANKING: TRENDS AND DEVELOPMENT PROSPECTS

Abstract

The article is devoted to the analysis of modern banking trends and risks, determining influence factors and development prospects. The purpose of the study is to analyze the global and systemic risks impact on the national banking sector and to develop effective risk-management measures against the growing influence of risk factors. The study carried out a comparative and factor analysis of banking sector indicators – indicators of specialization, risk of credit and deposit portfolios, profitability. The period of analysis from 01.01.2007 to 01.08.2022 made it possible to single out the impact on the national banking system of such large-scale disturbing risk factors as the global financial crisis, the start of military aggression, the coronavirus pandemic and the full-scale Ukrainian-Russian war. It was established that these factors affected the national banking sector with different time lags. The study revealed weak points in the domestic banks’ activity(liquidity problems, inefficient diversification of banking services, high risks of credit and deposit portfolios), changes in the priorities of bank specialization after the global financial crisis 2008 and, as a result, changes in the assets quality and resource base. The growing banks’ interest income as a result of their excessively risky credit policy has led to a growing share of non-working assets and non-working loans in the banks’ credit portfolio. This became one of the main factors that formed the market investment attractiveness and reduced the already limited banks’ opportunities to increase the deposit resource base which is significantly dependent on deposit resources attraction. The growth of modern banking traditional risks is enhanced by the new risk factors influence caused by the technological revolution and, as a result, the expansion scope of financial technology using and the digital risks growth. The results of the study made it possible to outline the development trends of modern banking and to work out separate recommendations for the effective banks’ activity in terms of increased global and systemic risks which take into account both foreign experience and the specifics of activities on the national banking market.