Developing Financial Integration with the Introduction of Financial Technologies in the Eurasian Economic Union Countries

Abstract

The global economic crisis of 2008-2009 and all subsequent crisis waves revealed the need to deepen regional integration processes in order to mitigate the consequences of crises and prevent future financial shocks. This aspect seems significant even for the European Union, which has already achieved a high level of financial integration due to the introduction of a single currency and the establishment of the European Central Bank. However, this problem is even more topical for countries with a significantly less developed level of integration, including the countries of the Eurasian Economic Union (EAEU). The positive effect of financial integration is largely due to financial globalization and digitization of the economy, fintech development, which is a transformative mechanism for coordinating fiscal and monetary policy instruments in financial services, as well as removing barriers to cross-border financial transactions. The purpose of the study is to uncover the prerequisites and trends of financial integration of the EAEU countries amid rapid fintech development and application. The possibilities of its use are revealed by blockchain, Big Data, artificial intelligence, crowdfunding, which can contribute to optimizing customer service, asset management of financial institutions in the domestic market, simplify and increase the speed of information exchange between financial institutions of different countries and the VAT refund process, increase investment flows, develop previously unused business lines, create collective projects and, as a result, contribute to further financial integration and mutually beneficial cooperation. The methodology of the study is based on the synthesis of comparative, structural, expert opinions and statistical analysis methods. Regulatory legal acts of the EAEU and individual countries of the alliance, reports and analytical materials of the Eurasian Economic Commission (EEC) and central banks of the EAEU countries served as the primary sources of the research. It has been revealed that the introduction of fintech in most of the analyzed countries outpaces the formation of the legal basis. At the same time, it was found that the spread of fintech can assist the implementation of all measures outlined by the Concept of Forming a Common Financial Market of the EAEU countries. Owing to Belarus, Kazakhstan and Russia, which are more advanced in fintech, Armenia and Kyrgyz Republic have the opportunity to achieve a competitive level in this area in a shorter time.