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Evolution of the Bank-firm Relationship

Author

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  • Vladimir D. Smirnov

    (Financial University under the Government of the Russian Federation, Moscow, Russian Federation)

Abstract

Increasing competition in all sectors of the economy, caused by the accelerated introduction of new technological advances in manufacturing processes, the creation of innovative products and the use of new business models, generates increased uncertainty in the development prospects of each market organization. The natural reaction of many commercial structures is to deepen specialization and competencies in their core activities. The purpose of the study is to identify the circumstances affecting interaction between a company and a bank in the new conditions. The article for the first time examines these relationships from the point of view of the need for each party to improve its own business, which objectively requires closer cooperation between them. Based on the results of the study, the author concludes that strengthening collaboration between a firm and a bank in the field of credit and payment operations and management of related risks is based on pursuit of each party’s own goals and increases the value of each of them. Forms of cooperation between a company and a bank can be different, but the most effective for each organization seems to be a partnership form of relationship, allowing the participants of cooperation to receive the greatest benefits and, at the same time, to strengthen and reinforce their positions in the core activities of each party.

Suggested Citation

  • Vladimir D. Smirnov, 2023. "Evolution of the Bank-firm Relationship," Finansovyj žhurnal — Financial Journal, Financial Research Institute, Moscow 125375, Russia, issue 5, pages 117-132, October.
    • Handle: RePEc:fru:finjrn:230507:p:117-132
    DOI: 10.31107/2075-1990-2023-5-117-132
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    References listed on IDEAS

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    1. Hunter, James D & Cooksey, Ray W, 2004. "The Decision to Outsource: A Case Study of the Complex Interplay Between Strategic Wisdom and Behavioural Reality," Journal of Management & Organization, Cambridge University Press, vol. 10(2), pages 26-40, January.
    2. Fremlin, Per & King, Joseph & Mathias, Peter, 2008. "Understanding corporate clients: Why banks need to rethink their business models and approach to client relationship management," Journal of Payments Strategy & Systems, Henry Stewart Publications, vol. 2(2), pages 119-126, January.
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      More about this item

      Keywords

      specialization; competition; cooperation; mutual benefit; efficiency; firm; bank;
      All these keywords.

      JEL classification:

      • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
      • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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