OREANDA-NEWS. July 09, 2012. Roland Berger Strategy Consultants and the National Research University "Higher School of Economics" held a roundtable on the financial sector evaluating the development of the finance industry in Russia and throughout the world as well as prospects for the Russian banking sector. This round table was hosted under the umbrella of Project 2012, as a part of the Roland Bergers GLOBAL TOPICS Initiative.

The discussion was divided into three main themes:

State regulation of industry and its impact on the banking industry

Innovations in the banking sector and the ability of Russian players

to generate innovation

The expansion of the Russian financial sector into international markets

The experts of the round table discussion concluded that state intervention and regulation are particularly relevant for Russian players. The Chinese financial model is a good example for a high level of control by the state, but at the same time, a direct state presence in some banks may be a "lesser evil", when compared with a situation where the nominally responsibility for the company is held by private investors.

If we talk about the topic of innovation, the possibility of the Russia's financial sector to generate its own innovations was seen as rather pessimistic, and that it should follow the lead of the developed markets. The key topics of the efficiency, optimization and cooperation with authorities are more vital for Russia than for the other countries.

Andrei Yakovlev, Vice Rector of the Higher School of Economics:

We live in a time of tumultuous change. Changes are occurring both in Russia and around the world. Our joint project is of interest in terms of a changing environment. Expectations play a very important role today, and they are directly related to how well the business and government understand each other. This underscores the importance of all of the actors involved maintaining communication with one another. If we maintain an open dialogue, we can better understand the opportunities and prospects for the financial industry.

Hendrik Bremer, Partner at Roland Berger in Austria, shared his thoughts:

"Today's discussion has shown how relevant the topic of state regulation is to the financial sector in Russia. At the international level, this topic is also being very widely discussed, but the Western viewpoint differs from that of Russia. Whereas the global community advocates the need to increase state control, there is talk about the need for the Russian government to reduce its interference in the activity of the banking industry. Like the global coordinator of Roland Berger's Project 2012, Charles-Edouard Bouee, I believe it is possible to compare the topics that are most relevant in all countries. European players are looking for ways to reduce their public debt, on the one hand, and to stimulate the economy, on the other.”

To sum it up, Maxim Bychkov, Partner of Roland Berger in Russia and CIS, said: "While progress is expected, above all, in markets throughout the CIS countries, where the players and the market are willing to accept Russian companies, if the state will favor the competition as well as support innovation and expansion."

Round Table: Short summary of the discussion

State control and regulation of banks likely to increase

Nataliya Orlova, Chief Economist at OJSC Alfa-Bank, concluded that big banks are using the state as a source of funding for their credit activity. "We need to create a more competitive environment, and we must not forget that at some point the state may be taken hostage by a strategy to encourage big banks."

Innovation based on trust

Andrei Yakovlev, Vice Rector of the Higher School of Economics, stressed that the introduction of any innovation requires a high level of trust between all partners involved. Given the technological capabilities and development of the Internet there is still room for new banking technology and products.

Maxim Bychkov, Partner at Roland Berger, suggested that the most important innovations for banks must be implemented with cost management in mind: Banks planning innovation should look for their examples to industries that carefully calculate all of their costs before proceeding to introduce an innovation.

Expansion of financial sector: Yes, but with the right strategy

Yuri Danilov, General Director of the Center for Capital Market Development Fund of the Federal Financial Markets Service: "If a strategy is clearly defined, it could become a competitive advantage. We remain on the sidelines, and the success of Moscow as a financial center has been underrealized: Poland has overtaken us as well as China. Outward expansion is limited by lacking development of the domestic market: the urgent task at this point is to fix that." However, he said that the expansion is only of interest to a limited number of large players.