BANK BUSINESS MODEL: ESSENCE AND INTERRELATION WITH THE STRATEGY FOR DEVELOPMENT

Abstract

The term “bank business model” has been introduced in the banking regulation with the Basel Committee since 2010, but it hasn’t been defined. In the article the critical analysis of theoretical approaches to defining the essence of bank business model has been given. It is determined that the only interpretation of this term has been absent, and the authors in their researches have refered to the business model definition. Descriptive and constructive definitions of the term “bank business model” have been offered. A descriptive definition identify the bank business model as a conceptual research tool for the bank, which reflects the logic of making a profit by providing a description of the main elements of business processes, their relationships, as well as the system of relations with the external environment and provides a simplified holistic view of the bank. Constructive definition justifies the need to study the bank business model at three levels: structural level – through the assessment of the structure of attraction and allocation of financial resources, systemic level – in terms of system analysis, which requires a description of the bank's business elements, their relationships, functions, processes and relationships and strategic level – as the internal capabilities of the bank must correspond to its position (competitive position) in the banking service market. The relationship between the bank business model and its development strategy has been determined. The bank's development strategy is based on a system of quantitative and qualitative indicators of development, reflected in financial plans, marketing policy, information technology development concept, personnel policy, the starting points for the creation and adjustment of which are functional strategies, coordination between which is possible if development strategy contains a description of the bank's business model – a comprehensive view of the object being modeled, accurately identifies its activities, which meets the requirements of the time, relevant to the current view of the banking business and allows the bank to achieve its goals.