3 September 2024
Developing
the banking system is essential in order to successfully overcome financial
risks
Regulating
financial relations and developing the banking system are key to improving
access to money. Banking institutions are introducing new tools and platforms
to raise financial literacy among the public. This in turn is helping people to
manage their personal finances in a more conscious and effective way. The
integration of advanced technologies and judicious state regulation help create
a solid foundation for overcoming financial barriers, and contributes to
sustainable economic growth. Those were the conclusions reached at a session
entitled Risk and Uncertainty in a Multipolar World: Solutions and Tools, which
took place as part of the Eastern Economic Forum.
KEY
CONCLUSIONS
The
development of information technologies has helped to solve new tasks
“It is
important to use new platforms in the complex decision-making models that we
are building... These should serve as a common basis for discussing further
steps. Behind all this also lies the development of information technologies,
which over the past 15 years have significantly changed not only the banking
sector, but also our everyday lives, thanks to new gadgets. They have opened up
new opportunities for solving previously unclear tasks at the confluence of
various disciplines and sciences,” Olga Dergunova, Deputy President and
Chairman of the Management Board, VTB Bank.
“In
order to effectively accumulate our capabilities, the country must speak a
common language, and now is the time to do so. This applies not only to
financial literacy but also to ensuring that decision-makers share a common
understanding of the general issues and methodologies related to risks at the
macro level, at the regional level, at the corporate level, and at small and
medium-sized businesses. <...> We must together recognize the impact
risks have on our lives, be they global political and economic risks, or
situational risks when implementing specific projects. We need to speak clearly
and simply, and structure our collective approaches. Perhaps this task
resembles that faced by our predecessors when they carried out literacy and
general education campaigns,” Sergey Gavrilov, Chairman of the Committee of the
State Duma of the Federal Assembly of the Russian Federation on Property, Land
and Property Relations.
PROBLEMS
A lack
of financial resources, which slows the process of implementing projects and
increases risks
“The budget was not designed for such a high key
rate. Subsidies are paid depending on the key rate. In a number of programmes,
there is a deficit with regard to sources of subsidies, even for projects that
had already been approved. And that’s not to mention new projects for these
programmes. A prime example is Resolution No. 191 [of the Government of the
Russian Federation: ‘On State Support for Organizations Implementing Corporate
Competitiveness Enhancement Programmes’ – ed.]. It exists in theory, but
in practice it isn’t doing anything, because there are no budget funds, and new
projects are not being approved. They are waiting their turn. And of course, if
the Central Bank continues to raise the rate, launching projects in other
sectors outside the programmes will simply become impossible until the
situation with the key rate normalizes,” Timur Belikov, Executive Vice
President, Gazprombank.
“Project financing deals are among the most
complex of their kind in finance. That is because they require substantial
expertise due to the many risks involved. <...> The Project Finance
Factory programme enables borrowers to protect themselves from the risk of key
rate increases. We see that the key rate is changing significantly, and those
who started their projects under the Project Finance Factory mechanism are now
very pleased with it, as the key rate is much higher than it was when they
began,” Dmitriy Aksakov, Vice-President, VEB.RF.
SOLUTIONS
Assessing
risks through employing new digital financial platforms, technologies, and
tools
“One of the most serious issues... are those
related to the protection of the financial system. That applies both at the
national level, and in terms of protecting individuals’ financial savings and
corporate finances from the increasingly growing threats of interference. Such
hostile interference by global groups occurs both at the corporate and
individual level. In this regard, we are not only looking to develop adequate
responses, but also consider it necessary to build multinational systems and
platform-based solutions to prevent these risks. These should also at the very
least monitor risks and alert us [to their presence – ed.],” Sergey
Gavrilov, Chairman of the Committee of the State Duma of the Federal Assembly
of the Russian Federation on Property, Land and Property Relations.
“We decided to build a platform. It’s called the
Centralized Institutional Risk Management Platform, and consolidates a great
many aspects of different risks. They include both natural and technological
risks. In terms of natural risks, we rely... on the Ministry of Emergency
Situations – their institutions, their models, and their data, which is now
quite accurate and, in fact, is the only option available regarding our
country. As for technological risks, we rely on our databases and access to the
databases of insurance brokers, who have been tracking various technological
solutions for a long time. They have also been tracking various technological
structures, and have quite a lot of information... regarding various risks
associated with equipment maintenance,” Igor Fedorov, General Director, RC
Complex Systems.
“One of the overarching objectives for the state
is to maximize the mobilization of financial resources in the country. The
thinking is that a significant amount of money in the country is not being used
to implement major projects which are key to long‑term growth. One of the ideas
being considered is for major financial institutions, such as VEB.RF,
Gazprombank, VTB, and Sberbank, to initiate projects and to help them through
the most difficult stages – structuring and construction. And when, for
example, a factory is built and begins generating income, this credit risk can
be transferred to a broader circle of investors – for instance, through the
securitization of loans. Then this risk can be sold in the form of bonds to a
wide range of investors,” Dmitriy Aksakov, Vice-President, VEB.RF.
Improving financial literacy with a
view to better regulating financial relations and developing the banking system
“The
financial industry has found itself at the confluence of several trends.
Firstly, there is global disruption to the chains we were once used to, and the
need to restructure them. Secondly, there is rapid technological progress. The
banking sector is always at the forefront, managing risks and mobile
applications, and interacting with clients. This makes it vital for it to be
able to adapt to technological trends. Thirdly, there is the need to improve
the general financial culture and to educate the public. Uncontrolled ignorance
and financial illiteracy pose risks not only to individuals, but also to the
entire financial system, as we observe in cases of money theft. The better the
technologies, the more vulnerabilities exist. And the less knowledge people
have about how to use these technologies, the higher the risks,” Olga
Dergunova, Deputy President and Chairman of the Management Board, VTB Bank.
“Financial literacy is a key topic right now. I
believe we’ve long needed a mandatory financial literacy course for senior-year
school pupils or higher education students alongside other courses,” Timur
Belikov, Executive Vice President, Gazprombank.
* This is a translation
of material that was originally generated in Russian using artificial
intelligence.
For more
information, visit the Roscongress Foundation’s Information and Analytical
System at roscongress.org/en
