TRANSFORMATION OF FINANCIAL AND CREDIT RELATIONS IN THE CONDITIONS OF DIGITIZATION OF BANKING ACTIVITIES

Abstract

The article explores the transformation of mechanisms for the formation of value, supply, and consumption of financial and credit products in the modern financial and digital space. The impact of digital technologies on the interaction system of financial relations participants, in particular the re-coordination of relations between them, is considered. Changes in the value creation process, the reduction of guarantees of traditional financial and credit institutions, and the transfer of responsibility for decisions to the participants in financial transactions themselves are analyzed. Particular attention is paid to the digitalization of banking activities as one of the main trends in the transformation of the financial system. The main driving forces of this transformation are considered, including the digitalization of capital and service markets, the growing role of information, the development of information technologies, the need to update the bank's operating model, changing customer needs, and the proliferation of mobile applications. The article also analyzes the advantages of mobile banking, digital banks, neobanks and their types, as well as the role of APIs in the development of digital banking. Trends such as open banking and Banking-as-a-Service (BaaS) are considered. It is determined that in the financial and digital space, the banking system retains a significant role in financial development but is undergoing serious structural and technological changes due to technological progress and changing customer needs. To meet these needs, banks must introduce financial innovations that provide new opportunities for value creation through the personalization of bank-customer relations. The expansion and improvement of the list of services based on interaction with consumers of banking services stimulate the processes of financial inclusion and ensure the financialization of all spheres of clients' lives. A feature of the relationship between the bank and customers – consumers of banking services in the financial and digital space is a close connection, when banking services are built into the full life of customers; instantaneity, simplicity, convenience, personalization and compliance with the characteristics of the needs of a particular client in terms of volume, cost, repayment method, and term of provision of banking services.