Retail banking is an essential part of the financial services, accounting for a large part of all banking revenues and capital raising. This business line is designing the vital sphere to apply the adequate decision making approach for customer engagement, sustain profitability and increase competitive advantages. The modern trends in retail banking globally are based on digital innovations, bionic transformation and new regulatory issues. Ukrainian banks have also taken the first step to apply on-line platforms and cashless methods in banking. However, problems occur in the implementation of current global trends in the domestic retail market, which need to be solved.The authors have identified the key objectives of market changes in retail banking operational processes, which have significant impact on the banking ecosystem creation of retail banking in Ukraine. The review part of the article studied the modern challenges and advantages of retail banking development in Ukraine with comparative analyses of current global and regional issues, based on digital technologies and innovations in financial industry. The results of the analyses investigate the state of retail banking, and prospects of revenue growth, explain the key performance indicators of retail banking services, present insights of the key drivers of the Ukrainian’s banking efficiency gap. Based on operational risks and productivity analyses, the authors estimated the negative issues in Ukrainian retail banking. The results enable existing banks to determine the financial and operational risks, and increase the effectiveness of applying digital innovations in domestic retail banking sector. The recommendations for the enforcement of the market and regulatory changes of retail banking landscape in the case of Ukraine are suggested.
The article examines the challenges and peculiarities of the management of the equity capital of Ukrainian banks during the period of martial law. It is proven that the current economic conditions of banks’ functioning are aggravated by a significant level of turbulence in financial markets, crisis phenomena in the real sector of the economy and the global energy market, which creates new challenges in the aspect of bank equity management. The existing understanding of the integrative role of banks’ equity capital in ensuring its functional adequacy to the needs of the national economy at each of the turns of its cycle is disclosed. The characteristic properties of banks’ equity capital, according to the practice of its management, are defined as favorable and those that bring additional challenges when increasing the capitalization of banks in the period of martial law. It was noted that the process of equity capital management has a contradiction at its core: on the one hand, the development of the bank is carried out mainly at the expense of borrowed funds, on the other hand, the scale of its activity is closely related to the amount of own capital. Therefore, it is advisable to make decisions in the field of the formation of the bank’s equity capital on the basis of a comparative analysis of the growth rates of risky assets and liabilities. The bank’s financial managers should pay critical attention to determining the value of equity capital, which will provide an opportunity to increase management efficiency and obtain a relevant information flow for making informed decisions. A comparative analysis of the main economic norms of the capital of the banking system of Ukraine for 2018–2022 justified the implementation of the basic norms regarding capital, however, the assessment of the structure of the equity capital of Ukrainian banks showed that the amount of equity capital continues to be less than the authorized capital, which is explained by the significant losses of the banking system of Ukraine. According to the results of the study, the modern problems of managing the equity capital of Ukrainian banks are substantiated, and priorities and recommendations for their solution are determined. It has been proven that in periods of turbulence, equity capital is more necessary to maintain the solvency of banks than to increase active operations, since capitalization processes occur more slowly than the trends of capital movement on a global scale require. In the conditions of limiting the number of external sources of capitalization of Ukrainian banks, special attention should be paid to the development of internal innovative financial and organizational tools capable of meeting the requirements of both bank owners, managers and clients. Among these tools, it is appropriate to single out corporate governance, in particular, the effective dividend policy of banks and the consideration in banking risk management systems of specific risks of the distribution of ownership rights and management, especially when it concerns the identification of beneficial owners from the aggressor country.
Cost-management is essential and highly specific sphere, which requires applying adequate decision-making approach as a part of the bank's internal value creation process. Correspondent banking is a dynamically growing area of management and controlling methods applied in banks on the one hand and high risk financial segment of the regulators' measures and expectations around the world on the other. The purpose of this research is to outline the main challenges for cost-management development in correspondent banking relationships (CBRs) around the world with recommendations for Ukraine. The paper explains the key reasons and essential components of cost-management system for managing risks and costs in CBRs based on the analytical results of transactions volume, comparing drivers of restriction of CBRs, rapidly growing number of different types of compliance and operational costs. As a result, the study highlights the cost-cutting measures based on digital assets solutions and blockchain technologies that can help banks to eliminate and lower costs of customer on-boarding, due diligence and money laundering prevention, foreign exchange and currency hedging, treasury and payment operations, liquidity and capital raising.
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