By 2024, the holdings of banks linked to marketplaces are anticipated to quadruple.
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In 2024, mergers between bank assets and marketplaces skyrocketed, according to Elvira Nabullina, Chair of the Bank of Russia, during her speech at the Data Fusion conference. These acquisitions haven't targeted huge banks, but their combined assets represent only 0.2% of the entire banking sector – still, they quadrupled last year, she added. This trend, Elvira explained, points to a lack of satisfaction from marketplaces with the previous partnerships proposed by banks.
Elvira further pointed out that the roles of banks and marketplaces in this system are yet undefined – partners or fierce competitors. She stated that e-commerce platforms are actively diversifying their services, aiming to head into other avenues of profit. This move is resulting in these marketplaces increasingly penetrating the financial sphere.
Elvira emphasized the importance of providing consumers the convenience to pay for goods using electronic wallets or cards, while offering additional services like loans if necessary – all in a single click. This "interpenetration" between markets and finance is expected to continue, she expressed.
In her speech, Elvira highlighted the need for the regulator to foster conditions for the development of the platform economy rather than restraining innovators. She mentioned transparency, data protection, operational reliability, balance, service neutrality, monitoring of financial risks, and audited reporting as key principles to regulate marketplace activities. To ensure fair rules for all, clear and transparent regulations are required, Elvira stressed.
Analysis by Frank RG suggests that marketplaces integrating banks into their apps grew significantly faster than traditional banks in 2024, with growth of 60% compared to 2023. Ozon Bank, Yandex Bank, and Wildberries Bank issued a whopping 57 million electronic wallets and cards in 2024, a jump of 2.3 times from the previous year. Analysts predict another 86 million cards to be issued in 2025 by these three banks.
Leaders of JSC "Digital Dynamics," Vladimir Frolov, Alexei Romanchuk, and Andrei Dorofeev, stated that traditional banks are gradually vanishing from the financial landscape, with marketplaces, telecom operators, and IT giants taking their place. The transformation of Russia's banking system will likely restructure from traditional structures to digital and neo-banks. But the question remains: who will spearhead this restructuring process, and how will the shift affect Russia's financial system?
The transformation is being driven by a mix of state policies, digitalization, and adaptation to sanctions, with state-owned institutions like Sberbank leading the charge. Affected traditional structures may find the shift to digital and neo-banks challenging, but clear and fair regulations can prevent vulnerabilities for suppliers and clients.
State-led fiscal policies, sanctions resilience, and rapid digitalization have influenced the transformation. Centralization of credit, increased reliance on state-owned banks, regulatory shifts prioritizing domestic production, and anti-crisis measures have impacted traditional structures significantly. Leading agencies in the restructuring process include Sberbank, the Ministry of Finance, and the Central Bank of Russia. Sanctions, adapted fiscal policies, digitalization, and focused regulations will likely deepen state control over credit allocation, accelerate digital adoption, and continue to establish Sberbank and state institutions as the primary catalysts for restructuring.
- The growth in mergers between bank assets and marketplaces, as highlighted by Elvira Nabullina, has significantly exceeded the previous year's figure, indicating a shift in marketplaces' dissatisfaction with traditional banking partnerships.
- A fact emerges from the analysis by Frank RG, where marketplaces integrating banks into their apps showed a growth of 60% in 2024, outpacing the growth of traditional banks. This trend continues, with predictions of 86 million more cards to be issued in 2025 by Ozon Bank, Yandex Bank, and Wildberries Bank.
- Elvira Nabullina emphasized the need for regulators to promote the development of platform economies rather than stifle innovators, focusing on transparency, data protection, operational reliability, balance, service neutrality, monitoring of financial risks, and audited reporting.
- The transformation of Russia's banking system, pushed by state policies, digitalization, and sanctions adaptation, is likely to see a shift from traditional banks to digital and neo-banks, with marketplaces, telecom operators, and IT giants taking over. However, the question remains about who will lead this restructuring process and how it will impact Russia's overall financial ecosystem.
