EVOLUTION OF BANKING SERVICES MARKET: THEORETICAL AND METHODOLOGICAL APPROACHES

• Main Author: V. Trokhymenko
• Format: Article
• Language: English
• Published: LLC "CPC "Business Perspectives" 2014-09-01
• Series: Економіка розвитку
• Subjects: banking service market; evolution of the banking service market; functional approach; structural and behavioral approach; institutional approach; financial globalization
• Online Access: http://www.ed.ksue.edu.ua/ER/knt/ee143_71/e143tro.pdf

The aim of the paper is to study the essentiality and main areas of evolution of the banking service market as a complex historical process that leads to changes and modifications of the investigated market. Analysis of native and foreign researchers' scientific works showed that the evolution of the banking service market should be interpreted as an objective historical process that provides a continuity of gradual quantitative and abrupt qualitative transformations based on the mechanisms of heredity, variation and selection, due to which the market gets stable, fixed and new features. Three theoretical and methodological approaches to the investigation of the evolution of banking service market were proposed, that provide the study of the market in three aspects: 1) changing the role and functional purpose of the banking service market in terms of turning it into a dominant segment of the financial market in countries with bank-oriented financial systems and reducing its value in the capital redistribution processes and providing the continuity of economic reproduction for market-oriented financial systems (a functional approach); 2) transformation of relationships between market players due to banking transnationalization, enhancement of banking capitalization and concentration of a large part of financial resources in a limited number of global players, which leads to the complexity of market's structure, changing of competitive relations and government regulation (a structural and behavioral approach); and 3) modification of the institutional and organizational mechanisms of the banking service market functioning, in particular, formation of supranational banking regulation and adaptation of national legislation to international norms and rules, transfiguration of market member organizations, initiation of new partnership forms between banks and non-bank financial intermediaries and so on (an institutional approach). It is determined that the current banking market is an important constituent of the global financial market, specific sectoral market that combines personalized and institutional entities in the provision and use of banking services.