Information asymmetry and the balance of interests of banks, their customers and the economy

Abstract

Subject. The article analyzes the imbalance of interests of banks and their clients in connection with information asymmetry. Objectives. The aims include improving the efficiency of the banking market of the Russian Federation to enhance its support to economic development, working out proposals to reduce the imbalance of interests of banks and their customers so that the latter achieve their goals, perfecting risk management in banks. Methods. The study draws on logical and systems approaches, general scientific methods of analysis and synthesis of empirical data, comparative analysis of theoretical approaches to consideration of problems. Results. The concentration of capital in a handful of banks in any country market does not promote competition development, customer service quality improvement, enhanced contribution of the banking system to the development of the economy through credit support. The findings can be used by the banking market participants, public authorities, research and educational organizations when considering options for the development of the banking industry. Conclusions. The relationship of banks and clients should be based on generation of revenues and profit through assisting customers to achieve their goals, rather than on simple sale of banking products. In this case, banks can receive maximum information for adequate assessment of risks related to the service. This approach is beneficial for both parties and is applicable for building relationships between individual banks with retail and corporate customers, and the banking system as a whole with the non-financial sector of the economy.