161 What do you think about challenges and perspectives of financial services market in modern information society?

An information society is a society where the creation, distribution, use, integration and manipulation of information is a significant economic, political, and cultural activity. The aim of the information society is to gain competitive advantage internationally, through using information technology (IT) in a creative and productive way. The knowledge economy is its economic counterpart, whereby wealth is created through the economic exploitation of understanding. People who have the means to partake in this form of society are sometimes called digital citizens. This is one of many dozen labels that have been identified to suggest that humans are entering a new phase of society.

The markers of this rapid change may be technological, economic, occupational, spatial, cultural, or some combination of all of these. Information society is seen as the successor to industrial society. Closely related concepts are the post-industrial society (Daniel Bell), post-fordism, post-modern society, knowledge society, telematic society, Information Revolution, liquid modernity, and network society (Manuel Castells).

162 What do you think about challenges and perspectives of financial services market in European integration?

The European Union operates a single economic market across the territory of all its members, and uses a single currency between the Eurozone members. Further, the EU has a number of economic relationships with nations that are not formally part of the Union through the European Economic Area and custom union agreements.

A prominent goal of the EU since its creation by the Maastricht Treaty in 1992 is establishing and maintaining a single market. This seeks to guarantee the four basic freedoms, which are related to ensure the free movement of goods, services, capital and people around the EU's internal market.

The European Economic Area (EEA) agreement allows Norway, Iceland and Liechtenstein to participate in the European Single Market without joining the EU. The four basic freedoms apply. However, some restrictions on fisheries and agriculture take place. Switzerland is linked to the European Union by Swiss-EU bilateral agreements, with a different content from that of the EEA agreement.

163. What do you know about emerging financial services markets?

Over the past few years, emerging markets have played a major role in driving global economic growth. Even faster growth can be observed in the financial services space, contributing to high shareholder return by emerging market institutions. Despite this strong growth, penetration (проникнення) of financial services remains low in many developing countries. Many emerging economies have undeveloped areas within their financial systems. Developing these opportunities will be critical to realizing economic growth and prosperity for people in these regions.

The most powerful opportunities for financial services firms to promote growth and stability in emerging markets lie in three specific areas: consumer financial services, small and medium enterprise (SME) financing, and corporate bond markets.

1.Consumer financial services

Many emerging-market institutions have advanced by adopting highly innovative approaches in their markets. They have overcome infrastructure limitations and addressed local needs through creative distribution models, risk practices, and partnerships. Some institutions, for example, can disburse financing to small business customers within 10 minutes through electronic channels and without documentation or guarantor requirements.

For providers of consumer financial services, the most significant “white space” opportunities for emergingmarket growth lie in mass-market services and products. Financial institutions have to adjust services for low-income consumers. Financial inclusion of the poor will also benefit emerging countries (reduce poverty, improve health care, and increase the consumer’s ability to afford needed goods on a more equitable basis).

Among successful innovations are:

• Sales and distribution partnerships between financial providers and non-financial organizations (including utility providers, retailers, supermarket chains, and community organizations).

• New models for low-cost retail branches, technology-enabled delivery channels, and so on.

2.Small and medium enterprise (SME) financing

Emerging markets face a credit paradox concerning SMEs, as well as their banks. Only one-third of SMEs, on average, have access to credit and loans, even though three quarters of them maintain bank savings and checking accounts. Banks, for their part, lack sufficient access to shared data (such as tax records, credit history, and legal status) to risk lending to many SMEs. As a result, many businesses lack cash to grow, while financial institutions miss the opportunity of potential SME borrowers. Emerging economies suffer because they depend heavily on smaller companies for economic growth and job creation.

Successful innovations in SME finance development include:

• Client micro-segmentation and customization strategies (such as “remote” relationship managers).

• Using transaction information and psychometric testing to develop credit risk-assessment tools and benchmarks.

• Adapting POS electronic networks to approve and deliver SME loans.

• Developing specialized financing sources, including venture capital and equity financing.

3.Bond markets can strengthen corporate and bank restructuring Well-functioning local corporate bond markets also provide institutional investors with an instrument that satisfies their demand for fixed-income assets, especially of long maturities.

The ability of a country to develop a corporate bond market is largely determined by two factors: the size of its economy and its level of economic development. There are considerable barriers to corporate bond development in emerging economies.

Successful innovations in corporate bond market development include:

• Developing multi-stakeholder engagement to support issuance and private placement of bonds in the least developed markets.

• Creating investor syndicates to lower issuance costs for large, repeat issuers. Creating central bank partnerships to promote development of regional bond markets.

• Building a bond investor base through pension fund and insurance reform.

Emerging economies cannot rely solely on capacity building to accelerate financial development. Traditional models often are unsuitable for seizing new opportunities. In many countries, the best path for accelerating financial gains will be “leapfrog” innovation that crosses borders, platforms, and concepts at a single bound.