COMPETITIVENESS OF UKRAINE’S BANKING SERVICES MARKET: SCALE FACTOR

Abstract

The need for effective development of Ukraine’s banking services market under conditions of expansion of foreign capital and international business rules requires the presence of competitive advantages of the national suppliers of banking services. In this context and from the point of view of the European integration processes in Ukraine’s economy, the development of modern tools of prudential supervision by the authorized bodies is becoming relevant.
The authors for the first time define the concept of competitiveness of the banking services market and analyze this competitiveness from the standpoint of estimation and comparison of the market indicators set of one country over aggregate indicators of corresponding markets of other countries.
A new unified methodology of complex estimation of the competitiveness of the banking services market based on the system of quantitative assessments and criteria is developed. The presented research covers the following points of the analysis of the market: territorial borders, capacity and scales; density and compactness of banks and branches; openness of the market; capacity and importance of services; density of income and services; entry and exit barriers; capitalization limits of banks; level of development of innovative services.
The approach with regard to the scale factor analysis of Ukraine’s banking services market for 2007–2017 is approved. The comparison of data and quantitative indices of Ukraine’s banking services market with the corresponding indices of other commensurate countries of euro-zone and world countries is performed. The place of Ukraine’s banking services market at the international level is determined. Such a comparison is provided in the context of markets in the countries with developed and transition economies.
It is found that at the world level and within the euro-zone, Ukraine’s banking services market corresponds to a small scale; the heterogeneity and disproportionality of services within the country are present; there exist approximately equal influences of residents and foreign owners of banks; the market has high entry barriers for new players and is at the beginning stage of the digital revolution. Bankruptcy of the largest bank will be tangible for the banking sector of Ukraine, but not destructive for the financial system of the country.