Transformations  in
Business & Economics

Convergence in the Financial Services Industry: The Case of Russia
Natalia Kuznetsova

ABSTRACT. Processes of globalisation, liberalisation and concentration of the financial capital, have generated new outlines of a world financial system. Financial convergence and a financial conglomeration as various sectors of the capital market diffusion becomes one of the central elements of the contemporary financial system. The analysis of financial convergence allow making the conclusion about coexistence of three basic forms of financial conglomerates: ‘bankassurance’, ‘assurfinance’, ‘allfinance’, meaning transition from product-oriented to client-oriented strategy of the integrated financial products sales. The central nucleus of financial convergence in the developed countries is banks and insurance companies. The Russian process of financial convergence compared to the developed countries is concentrated not in financial, but in oil and gas, extracting, mining and metallurgical complexes, which were created in the Soviet period and survived through certain modernization after 90-th. Extremely high level of transaction costs, total mistrust to opaque transactions in the market, instability of state regulation, etc. promoted development of various forms of association of the Russian enterprises as large vertically - integrated companies and financial conglomerates within the framework of which industrial - trading chains were created and the policy of costs reduction, tax planning and search of investments were carried out.

KEYWORDS: financial services market, banks, insurance services, financial convergence, financial conglomeration, Russia.

JEL classification: G22, G21, O47, P2.