c.ph.s., docent Moiseieva F.A., Kononenko O.T.

Donetsk national university of economics and trade
named after Mykhaylo Tugan-Baranovsky

Innovation and Ukrainian banks

Any movement forward based on the introduction of new products, forms, methods, technologies, is the innovation process. This is relevant in context of high dynamics of economic development and strong competition. It is the working environment for a banking institution.

Under the dynamically changing conditions any bank as a full market participant is forced to change itself and initiate internal innovation. No doubt, these processes should not occur spontaneously, since their implementation in most cases require a significant financial costs and therefore an assessment of the risks. That is why, innovative strategies must be part of an overall development strategy of the banking system.

One of the main obstacles to the formation of an effective innovation policy is the difficult for assessing the innovative potential of the different variants of the organizational and economic development of the banks. Structuring the innovation will enable to determine not only the choice of a particular strategy or method of construction of economic and institutional framework of bank management, but also the nature of future banking activities and the form of customer service.

Research questions of financial, organizational and economic innovations are of particular relevance at the present stage of economic development. The financial crisis and methods of withdrawal from various banks showed that without activity in the area of innovation it is difficult to survive and retain their positions. It was recognized by the best professionals in the banking industry, and therefore the international competitions were conducted to assess the innovative activities of banks. Their aim was the selection of the best innovative achievements of banking and the opportunity for other banks to use them.

The most famous is the international competition named Innovation in Banking Technology Awards, held annually by the magazine The Banker. The Banker Rating is a world recognized index of global banking institutions.

Main category:

- Innovation in custody and securities services;

- Innovation in delivery channel technology;

- Innovation in cash and treasury technology;

- Innovation in clearing and settlement technology;

- Innovation in data management technology;

- Innovation in payments technology;

- Innovation in financial inclusion technology;

- Innovation in information security technology;

- Innovation in customer service and marketing technology;

- Innovation in customer service and marketing technology;

- Innovation in risk management technology;

- Innovation in dealing technology.

This competition nominates the winner in each category, and the bank, which has shown good results in this area of activity.

Banks around the world accepts the contest. And it should be noted that among the winners not only the banks with a long history in the banking market, but also the banks recently emerged. For example, in 2011 won the India's Yes Bank, which emerged in the banking market 6 years ago in the category of Innovation in cash and treasury technology.

One of the Ukrainian banks has been participating in the competition for several years. It is the Privat Bank. In 2010, the Privat Bank won in the category Innovation in cash and treasury technology for providing electronic delivery system LiqPay. The essence of the "electronic delivery" is that the bank's customer service delivery is only granted after the urgent bills, but coins are not issued on hand: instead of coins customer receives a voucher-delivery. The amount specified in the voucher, can be entered either the current or card account online bank Privat24 or on account of LiqPay.

The same bank participated in the competition in 2011 and received the highest grade «Highly Rated» by experts in nomination “Innovation in cash and treasury technology”. As stated in the June issue of The Banker magazine, the technology proposed by the Privat Bank, helps to solve one of the key problems in the cash transaction - earnings accounting, before it is delivered to a bank and converted. Minimizing paper significantly reduces the time for each operation, save natural resources, as well as automatically eliminates errors.

In addition, in 2011, two well-known companies in Finance BAI and Finacle^TM declared the new international competition Global banking innovation awards, designed to support innovation in retail banking. The main contest nominations were:

- product innovation award;

- service innovation award;

- disruptive innovation award;

- most innovative bank of the year award.

Unfortunately, none of the Ukrainian banks participated in this competition.

As a result, the above, it may be noted that:

- in the banking industry much attention is paid to innovation, which is confirmed by international competition in this area;

- the presence of the latest information on the best innovative products, services and technologies is externally important ;

- the potential presence of Ukrainian banks in developing and implementing innovations in their field is very desirable.