Regional banking systems and their digitalization processes

Abstract

Long-term tendencies in the economical development of specific regions determine the nature of digital transformations in their respective socio-economic systems. The global trend for digitization of economical and financial relationships affects the growth direction of national economies and their local components. This issue remains relevant for many countries, including Russia. The present study examines the specificity of digitization processes in regional banking systems and banking markets and the problems associated with them. The authors focus on digitalization and financial availability rates in the most economically depressed regions of the country. This article aims to identify barriers to the digitalization of banking markets in a specific category of Russian federal subjects demonstrating insufficient banking institutions and low banking activity. The authors hypothesize that the digitalization rate in banking markets depends on the availability of banking institutions in the region and the development of informational and communicational infrastructure. In order to achieve the stated goal, the authors used structural and dynamic analysis, method of coefficients, and index method. The paper considers the necessity and major factors of digital transformation in the separated regional economy. The authors provide definitions for digital finance and access to finance. Furthermore, they describe the relationship between these spheres in modern conditions. The conducted analysis covers digitalization rates in a group of economically lagging regions and digitalization outsiders. The authors assess whether the researched regions have satisfactory access to banking services and determine the extent to which the regional informatization indicators correlate with the overall digitalization of the banking sector.