Emergence of Non-Traditional Financial Service Providers in the Market - A Threat or an Opportunity for the Georgian Banking Industry

Tea Kasradze
Caucasus International University

Abstract

Each banking institution has a customer-oriented, priority-oriented strategic plan, although the sudden emergence of competition does not allow them to relax. The explosion of new technologies and the rise in consumer demand have been putting pressure on banks since the 2008 recession. Retail banking customers are constantly expecting new, improved, affordable, convenient continuous service from the bank. In an environment of increasingly competitive, innovative financial services, banks need to be able to maintain not only customers but also brand awareness. The emergence of FinTech and BigTech in the market, which reduces the relationship between banks and their customers, completely changes the banking industry. Today we face a new open ecosystem of consumers, traditional banks, FinTech and BigTech companies, regulators, developers, non-banking firms and other players, with customers at the center. Banks will have to significantly change their commercial and operating models to retain customers and remain active players in the market. This paper is a study of the impact of digitalization of financial services on the banking sector based on the study and analysis of reports of the Bank of International Settlements and various international organizations, local policy documents, reports and regulations of the National Bank, the papers of various researchers and their secondary data. Based on the research, conclusions are made and relevant recommendations are developed. Keywords: BigTech, FinTech, bank industry, financial services, consumers, digitalization


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