Abstract
The relevance of the topic of financial convergence considered in the article is primarily dictated by the intensifying processes of globalization, which generate an increase in competition between participants in the financial market. An essential global trend in the development of the financial services industry has also become the process of increasing interpenetration by different participants of various sectors of the financial market into its other segments due to competition - financial convergence. The processes of financial convergence and the formation of new institutional forms of financial associations (financial conglomerates) in the world economy already have a significant impact on the real and financial sectors, public finance and other spheres of the economy. The article examines the prerequisites for the emergence and use of financial convergence by participants in the global financial services market to provide additional competitive advantages and stable development by modifying the established order in the sectors of the financial market. On the example of financial convergence between companies in the insurance and pension sectors, through the creation and participation in financial conglomerates, the main problems of the current state of the global financial market are considered. The article discusses practical ways to determine the presence of financial convergence, based on a modern approach using the methodology for calculating sigma convergence.
Highlights
The global financial system over the past few decades has experienced a significant number of crises, transformations and changes
Since the emergence of money as a means of payment, the financial services market has come a long way from moneylenders who provided bankrupt kings with loans for campaigns of conquest, to transnational financial conglomerates supporting the development of economic systems of entire continents, from cowrie shells as the first money to virtual cryptocurrencies that exist only as lines of code [9; 12]
Speaking about the processes of integration and convergence in financial markets, one should immediately distinguish between these concepts, since, despite their similarity in several features, they are based on fundamentally different approaches [11; 14]
Summary
The global financial system over the past few decades has experienced a significant number of crises, transformations and changes. The processes of convergence, as a mechanism of radical integration in the financial services market, began to appear at the beginning of the 20th century but reached their greatest heyday in its second half [8]. Speaking about the processes of integration and convergence in financial markets, one should immediately distinguish between these concepts, since, despite their similarity in several features, they are based on fundamentally different approaches [11; 14]. Financial convergence is based on the observance of the principle of heterogeneity, that is, heterogeneity in composition and origin in the functional structures and management strategies are adopted in financial institutions. The signs of heterogeneity during convergence in the financial market should include: heterogeneity of market entities in aggregate or one of the characteristics; heterogeneity of institutions, both in composition and origin; heterogeneity of strategic decisions and their adoption in financial institutions of different segments of the financial market; heterogeneity in the composition, quality and volume of services included in the financial product [1; 15]
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