The COVID-19 pandemic has given Russian financial institutions the impetus to increase the implementation and use of innovative financial technologies, which will, in turn, serve to further accelerate the process of digital transformation in the financial sector in the country. At the same time, the benefits associated with digital transformation are accompanied by new risks. In particular, rapid changes can lead to a greater fragmentation of banking services, especially as consumers learn and become comfortable with the various services each particular financial institution excels at. There are also risks associated with technological and/or infrastructural disruptions if financial institutions don’t adequately invest in the development of information technology, data protection systems and infrastructure.
Although these risks (and others) are important to consider and mitigate, it should be noted that Russian financial institutions have the capacity and tools to effectively manage these risks. In fact, most Russian financial institutions began adapting to the realities of digital transformation years ago and have developed well-thought-out digital strategies. While the current landscape clearly favors some financial institutions over others, the ones that have embraced (and will continue to embrace) digital transformation initiatives in a responsible manner will be poised for great success in Russia and (potentially) abroad.