International Journal of Economics and Business Administration

Figure 1. The mechanism of transformation of the banking sector with the 
introduction of financial technologies (Kazarenkova and Svetovtseva, 2018) 
According to experts, in the banking sector, the digital transformation can take place 
in five main stages (Figure 2). 
 
GROWTH FACTOR: 
high speed of responsiveness of the banking sector 
to the introduction of financial technology tools, an 
integrated approach to customer service, a wide 
range of channels of banking services promotion 
FACTORS OF REDUCING: 
economic and financial crises, low level of 
financial literacy of the population, increased 
competition from non-Bank organizations 
TRANSFORMATION OF BANKING SECTOR 
Improving the quality 
of customer service, 
providing access 24/7 
Ensuring the loyalty of Bank 
customers, stabilizing the customer 
base 
Packaging services based 
on financial technology 
and digital innovations 
Reduction 
of 
transaction costs, the 
ability to compete in the 
price range 
Growth 
of 
operating 
income, 
balance of banking operations 
Expanding the package of 
services for each client, 
improving the reliability 
of banking operations 
Formation of a customer-oriented banking system that ensures the reliability of banking 
operations, constant access to financial services and meets the requirements of the digital 
economy 

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S.S. Galazova, L.R. Magomaeva 
 
49  
Figure 2. Stages of the digital transformation of the banking sector 
3. Results 
 
Based on the analysis of foreign experience, it is possible to identify the main 
promising areas of the financial technologies use in the banking sector, including: 
1. Application of smart assets and smart contracts for loans. The implementation of 
blockchain- technology in the form of a "smart" asset (blockchain 2.0) can be used to 
account for tangible and intangible assets, including financial ones. Assets, the 
ownership of which is registered on the blockchain, transactions with which (on the 
transfer of ownership to which) can be made with the help of smart contracts. 
2. Keeping credit histories of borrowers using blockchain technology. Blockchain-
platform "Credit Bureau" (White Paper on the Development of China's Blockchain 
Industry, 2018) – accumulation and storage of data on the credit history of borrowers 
will allow the sharing of information by interested users without intermediaries. 
3. Blockchain-technologies (platforms) for the use of bank guarantees.