Financial supermarket: features of activity and development prospects

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

The financial services industry is a lucrative but highly competitive environment. Companies here are trying to provide customers with a more complete and up-to-date range of services. The options offered by banks are no longer considered exhaustive today. A new form of organization is gaining popularity - the financial supermarket. In the article we will analyze what it is, what are its features, what services are provided. Let's discuss whether there are prospects for the development of such financial forms in Russia.

What is this?

Financial supermarket - a division of a credit, financial institution that offers a full range of financial services and products. Banking comes first. But besides them, investment, consulting and insurance are available.

The main goal of financial supermarkets is to make it easier for citizens to get financial products and services. The creators also want to make the stay of customers in such organizations as comfortable as possible: reduce waiting time, reduce the amount of money spent.

Classification

Though the financial supermarkets introduce themselvesuniversal institutions, in world practice it is relevant to divide them by areas of activity:

• Working with investment products.
• Employment in the insurance industry.
• Retail banking services.

As a rule, the division is carried out along the prevailing vector of the universal company.

Purposes of Creation

Financial supermarkets are created for specific purposes:

• Get a well-functioning association, a large corporation providing financial products.
• Exchange customer databases between separate areas of activity of such a supermarket.
• Save cash by scaling up. For example, reduce the number of jobs with overlapping service functions.
• To minimize the cost of advertising and exploring new market segments. In the case of a financial supermarket, its founder can simultaneously promote several services and products at once.

Emerging Trends

Why did Tinkoff financial supermarkets and others like them appear? It's all about global trends:

• Intensifying competition among financial institutions. It is especially noticeable in the most profitable segments of the banking business.
• A necessary condition for the survival of financial institutions is their consolidation.
• Simplification of the legislative sphere of many states. In particular, earlier lawsa considerable number of states prohibited credit institutions from providing commercial services.

What's going on in the world?

Thus, the financial supermarkets of the ETP GPB (electronic trading platforms of Gazprombank) did not appear by chance, but under the influence of circumstances. Today, banks need to create powerful financial integrated intermediaries that will be able to offer the population a wide range of financial products and services. At the same time, retail business development programs are being chosen to reduce the interest margin and attract large corporate clients.

Such financial intermediaries try to attract the attention of customers, calling themselves universal financial supermarkets. They are able to offer a comprehensive, individual approach. That is, they increase the volume of joint sales of banking and non-banking products to the maximum.

Today, such models of financial institutions are rapidly developing their own retail chains, improving the quality of customer service, expanding the list of services provided, and exploring new areas of activity.

The most developed financial supermarkets operate here:

• USA.
• Benelux States.
• Southern Europe.
• Japan.

Basic forms of organization

There are also several main forms of emergence and development of such a form of financial organization as a financial supermarket:

• Joint venture. Such an organization consists of a bank, an insurance company and an investment company.
• This model of an institution is based on a strategic alliance, a distribution agreement. The bank here will function as a channel for the sale of some standardized products. It can be OSAGO, shares of mutual funds, etc.
• The bank is to some extent the owner of an investment or insurance company.
• The bank forms a new insurance company.
• A qualitatively new financial supermarket is being formed. It has the ability to offer a wide variety of financial services and financial products under a single brand.

A place in the modern economy

It seems that the financial supermarket is a new evolutionary stage of the banking system. But at the same time, many leading economists believe that such a model is unacceptable in the current conditions of economic development.

The main difficulty in its implementation is connected precisely with the extended range of services provided. An organization that is at the same time an investment, commercial bank, insurance company, hedge fund is difficult to manage. It is quite difficult to find a director who can fully manage such a variety of vectors, control them.

After the first financial supermarkets were launched, this problem was exposed, the idea arose of hiring several managers at once - for each of the activities. But at the same time, they should be aware of each other's affairs, on commonmeetings to resolve issues. However, this scheme is rather inefficient in practice.

History of the model in the world

This phrase came into use in the 1980s. But the first financial supermarkets appeared in the 1920s in the United States. The first half of the 20th century was unfavorable for this form of organization - American laws forbade credit institutions to combine financial and commercial activities. The restriction was lifted only in 1999.

In Europe, financial credit supermarkets were recognized a little earlier - in the 1980s.

History of the model in RF

In Russia, interest in this model of financial organization appeared in the 1990s. For example, "Finam" determined for itself such a form as the main one in 1997. In 2002, Uralsib publicly announced the transition to the financial supermarket model. Another major domestic bank, VTB, followed suit.

But still, financial supermarkets in Russia are still at the initial stage of their formation. Those forms of financial organizations that exist today in the Russian Federation can be attributed to this model rather conditionally. The fact is that each representative of this segment understands the term "financial supermarket" rather individually. The following interpretations are common:

• Holding, consisting of diversified financial institutions. They can be management and brokerage firms, banks, private pension funds, insurance companies, etc.
• Agents of several combined companies.
• Separate banks,which are called financial supermarkets due to the fact that they simultaneously provide brokerage services, trust management, provide units of mutual funds under their own agency schemes.

It is not uncommon for various credit institutions to give themselves such a name for the sake of a "red word", attractive advertising.

So far, there are no financial supermarkets in Kirov, Moscow and other Russian cities, based on the traditional understanding of the word. There are universal banks that can offer a variety of financial products and services.

Institutional Benefits

The creation of financial supermarkets turns into the following pluses for the founders:

• Growth in sales due to comprehensive development of retail chains.
• Increased commission surcharges.
• Increase in customer bases.

For visitors to such organizations, the advantages are as follows:

• A wide range of services and products, a we alth of choice.
• Complex, individual approach.
• Single quality standards for all service vectors.
• Saving time and money.

The problem of modern financial supermarkets

The first financial supermarkets in Kirov, Moscow and other cities of Russia are not such in the original interpretation of this concept.

At first glance, this model promises only pluses - a diverse range of financial services, fast customer service,saving money and time. But modern Russian financial supermarkets also face a whole range of difficulties:

• Distrust of the population. Russian citizens are still suspicious of the possibility of opening a retirement account, taking out a loan and insuring their property in one place.
• The activity of such models of financial organizations is appropriate for large federal cities. But as for small settlements, rural areas, single-industry towns, here financial supermarkets will not become relevant soon. The success of such an enterprise largely depends on the income of the population, its ability to acquire such financial products.
• Shortage of qualified personnel. Financial supermarkets offer personalized service. Accordingly, for each vector here you need to select a qualified specialist, an ace in his field. And the spheres of knowledge of managers of such organizations should be expanded several times over. After all, they need to manage several different areas of activity at once. Hence the consequence - the lack of "quality" employees capable of providing the necessary level of sales.
• Financial supermarkets in Moscow tend to retrain mainly banks. Such an institution needs to organize a large-scale retraining of employees who previously worked only in the banking sector. The same can be said about insurers, employees of investment companies.
• There is no macro-regulator in the Russian Federation capable of controlling the activities of financial supermarkets. Banking activitiesregulated by the Central Bank, investment institutions - by the Federal Service for Financial Activities, insurers - by the Federal Insurance Supervision Service.

Prospects for development in Russia

According to studies, none of the financial supermarkets operating in the territory of the Russian Federation is such in the full sense of the word, in comparison with similar foreign structures.

But there is still a future for the development of this form of financial institutions in Russia. But, as experts say, its development will require at least 10 years of investment. Then it will be possible to get financial supermarkets with the maximum range of services, for which uniform quality standards apply. The most suitable model for Russia is the merger of large banks with significant non-bank intermediaries.

Other experts say financial supermarkets are doomed. And as a form of organization they will soon exhaust themselves in the West. At the same time, things may not even reach their full development in the Russian Federation.

One way or another, but in certain countries today there are full-fledged financial supermarkets. In Russia, such a model of organization is developed conditionally. The firms representing it are only partially financial supermarkets.