Russian Central Bank: Evolution of Fintech Companies Will Cause Bank Affiliations to Disappear

Development of financial technologies and fintech companies will optimize the Russian banking network, while the banks themselves will be engaged in creating infrastructure for fintech companies providing various services to their customers.

This is the brief extract of the speech given at Fintech Lab 2016 on June 28 by Vadim Kalukhov, director for financial technology department at the Bank of Russia.

He noted the trend was evident in Europe and North America, while in Russia the shrinkage of affiliations network is currently at 1 to 2%.

“Physically, the number of bank affiliations will be constantly shrinking. This trend we’re living in, is inevitable. In the Russian Federation, current shrinkage rate is around 1 to 2 per cent, and some banks even create more affiliations. However, programs for optimizing affiliations network is something we have to live with,” Kalukhov said.

He also noted that the market welcomes services for individuals, and confirmed that generally the Central Bank is ready to negotiate with private companies.

“Investment rate increases, but it’s mostly about services for individuals, and sometimes about those for minor enterprises. Investments in major corporations are scarce. In terms of services for individuals, we see a great desire to develop them in the market. We’re monitoring the consumers’ attention, and focus on ubiquitousness of services, expectations, and end-to-end interaction. We have lots of applications asking us to standardize any kinds of interactions, and support small companies. We’re quite cautious about it, but we’re ready to negotiate,” he said.

Kalukhov also said that the interest towards blockchain technology has faded.

“We’re witnessing some cooldown in regard of distributed ledgers. However, there are four or five successful use cases that are successful and talked about. The Bank of Russia is a participant in one of them, we’ll tell more about it later. There are many open questions, but we definitely support the technology, as we understand that it will create a market niche, including Russian markets. Recently we all visited Skolkovo, where Vitalik Buterin was talking about irreversibility of transactions in Ethereum,” he added.

Earlier, Sberbank VP Andrei Sharov conceded that blockchain technology may cause banks to disappear in ten years, and thus lots of finance experts, including himself, will have to find another job.

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