Financial Innovations for Companies Offered by Banks: Polish Experience
Financial innovations can be regarded as the cause
and the effect of the evolution of the financial system. Most of
financial innovations are created by various financial institutions for
their own purposes and needs. However, due to their diversity,
financial innovations can be also applied by various business entities
(other than financial institutions).
This paper focuses on the potential application of financial
innovations by non-financial companies. It is assumed that financial
innovations may be effectively applied in all fields of corporate
financial decisions integrating financial management with the risk
management process. Appropriate application of financial
innovations may enhance the development of the company and
increase its value by improving its financial situation and reducing
the level of risk. On the other hand, misused financial innovations
may become the source of extra risk for the company threatening its
further operation.
The main objective of the paper is to identify the major types of
financial innovations offered to non-financial companies by the
banking system in Poland. It also aims at identifying the main factors
determining the creation of financial innovations in the banking
system in Poland and indicating future directions of their
development.
This paper consists of conceptual and empirical part. Conceptual
part based on theoretical study is focused on the determinants of the
process of financial innovations and their application by the nonfinancial
companies. Theoretical study is followed by the empirical
research based on the analysis of the actual offer of the 20 biggest
banks operating in Poland with regard to financial innovations
offered to SMEs and large corporations. These innovations are
classified according to the main functions of the integrated financial
management, such as financing, investment, working capital
management and risk management.
Empirical study has proved that the biggest banks operating in the
Polish market offer to their business customers many types and
classes of financial innovations. This offer appears vast and adequate
to the needs and purposes of the Polish non-financial companies. It
was observed that financial innovations pertained to financing
decisions dominate in the banks’ offer. However, due to high
diversification of the offered financial innovations, business
customers may effectively apply them in all fields and areas of
integrated financial management. It should be underlined, that the
banks’ offer is highly dispersed, which may limit the implementation
of financial innovations in the corporate finance. It would be also
recommended for the banks operating in the Polish market to
intensify the education campaign aiming at increasing knowledge
about financial innovations among business customers.
[1] S. Michalopoulos, L. Leaven, R. Levine, “Financial Innovation and
Endogenous Growth”, Working Paper 15356, Cambridge: National
Bureau of Economic Research, September 2009.
[2] A.W. Mullineux, “Financial Innovation and Social Welfare”, Journal of
Financial Regulation and Compliance, 18(3), 2010, pp. 243-256.
[3] B.J. Henderson, N.D. Pearson, “The Dark Side of Financial Innovation”,
2009, Obtained from http://ssrn.com/abstract= 1342654.
[4] N. Jenkinson, A. Penalver, N. Vause, “Financial Innovation: What Have
We Learnt?” Bank of England, Quarterly Bulletin, No 3, 2008, pp. 330-
338.
[5] D. T. Llewellyn, “Financial Innovation and the Economics of Banking
and the Financial System” in: Financial Innovation in Retail and
Corporate Banking, L. Anderloni, D. T. Llewellyn, R. H. Schmidt (ed.),
Cheltenham: Edward Elgar, 2009.
[6] L. Anderloni, P. Bongini,”Is Financial Innovation Still a Relevant
Issue?” in: Financial Innovation in Retail and Corporate Banking, L.
Anderloni, D. T. Llewellyn, R. H. Schmidt (ed.), Cheltenham: Edward
Elgar, 2009, pp. 41-43.
[7] F. J. Fabozzi, F. Modigliani,”Capital Markets. Institutions and
Instruments”, Upper Saddle River: Pearson Education International,
2003.
[8] W.S. Frame, L.J. White, “Technological Change, Financial Innovation,
and Diffusion in Banking” (Working Paper 2009-10). Atlanta: Federal
Reserve Bank of Atlanta, 2009.
[9] J. Błach,”Financial Innovations And Their Role In The Modern
Financial System – Identification And Systematization Of The
Problem”, Financial Internet Quarterly “e-Finanse”, vol. 7, no. 3,
2011.
[10] J. Lerner, P. Tufano, “The Consequences Of Financial Innovation: A
Counterfactual Research Agenda”, Working Paper 16780, Cambridge:
National Bureau of Economic Research, February 2011.
[11] Z. J. Gubler, “The Financial Innovation Process: Theory and
Application”, Delaware Journal of Corporate Law, vol. 36, 2011.
[12] J. Błach, “Changes in the Business Environment as the Major Motives
for Implementing Financial Innovations in the Corporate Financial
Strategy” in: Finanse w niestablinym otoczeniu – dylematy i wyzwania,
Finanse przedsiębiorstw, H. Zadora, G. Łukasik (ed.), Studia
Ekonomiczne. Zeszyty Naukowe Wydziałowe 107, Katowice:
Uniwersytet Ekonomiczny w Katowicach, 2012, p. 15-24.
[13] S. A. Lumpkin, “Regulatory Issues Related to Financial Innovation”,
OECD Journal: Financial Market Trends, 2009(2).
[14] J. Błach, “Wykorzystanie innowacji finansowych w strategii finansowej
przedsiębiorstwa”, in: Kontrowersje wokół finansów, T. Famulska, J.
Nowakowski (ed.), Warszawa: Difin, 2010, pp. 326-330.
[15] P. Tufano, “How Financial Engineering Can Advance Corporate
Strategy“, Harvard Business Review, January-February 1996, pp. 136-
146.
[16] M. H. Miller, “Financial Innovation: The Last Twenty Years and the
Next“, Journal of Financial and Quantitative Analysis, vol. 21, no. 4,
December 1986.
[17] Report on the condition of Polish banks in 2014, KNF,
http://www.knf.gov.pl/Images/RAPORT_O_SYTUACJI_BANKOW_20
14_12_tcm75-41472.pdf
[18] J. Błach, “Enterprise Risk In Terms of Innovative Financial
Mechanisms”, in: Finansowe uwarunkowania rozwoju organizacji
gospodarczych, Ryzyko w rachunkowości i zarządzaniu finansami, J.
Turyna, J. Rak (ed.), Warszawa: Uniwersytet Warszawski, 2013, pp. 47-
59.
[1] S. Michalopoulos, L. Leaven, R. Levine, “Financial Innovation and
Endogenous Growth”, Working Paper 15356, Cambridge: National
Bureau of Economic Research, September 2009.
[2] A.W. Mullineux, “Financial Innovation and Social Welfare”, Journal of
Financial Regulation and Compliance, 18(3), 2010, pp. 243-256.
[3] B.J. Henderson, N.D. Pearson, “The Dark Side of Financial Innovation”,
2009, Obtained from http://ssrn.com/abstract= 1342654.
[4] N. Jenkinson, A. Penalver, N. Vause, “Financial Innovation: What Have
We Learnt?” Bank of England, Quarterly Bulletin, No 3, 2008, pp. 330-
338.
[5] D. T. Llewellyn, “Financial Innovation and the Economics of Banking
and the Financial System” in: Financial Innovation in Retail and
Corporate Banking, L. Anderloni, D. T. Llewellyn, R. H. Schmidt (ed.),
Cheltenham: Edward Elgar, 2009.
[6] L. Anderloni, P. Bongini,”Is Financial Innovation Still a Relevant
Issue?” in: Financial Innovation in Retail and Corporate Banking, L.
Anderloni, D. T. Llewellyn, R. H. Schmidt (ed.), Cheltenham: Edward
Elgar, 2009, pp. 41-43.
[7] F. J. Fabozzi, F. Modigliani,”Capital Markets. Institutions and
Instruments”, Upper Saddle River: Pearson Education International,
2003.
[8] W.S. Frame, L.J. White, “Technological Change, Financial Innovation,
and Diffusion in Banking” (Working Paper 2009-10). Atlanta: Federal
Reserve Bank of Atlanta, 2009.
[9] J. Błach,”Financial Innovations And Their Role In The Modern
Financial System – Identification And Systematization Of The
Problem”, Financial Internet Quarterly “e-Finanse”, vol. 7, no. 3,
2011.
[10] J. Lerner, P. Tufano, “The Consequences Of Financial Innovation: A
Counterfactual Research Agenda”, Working Paper 16780, Cambridge:
National Bureau of Economic Research, February 2011.
[11] Z. J. Gubler, “The Financial Innovation Process: Theory and
Application”, Delaware Journal of Corporate Law, vol. 36, 2011.
[12] J. Błach, “Changes in the Business Environment as the Major Motives
for Implementing Financial Innovations in the Corporate Financial
Strategy” in: Finanse w niestablinym otoczeniu – dylematy i wyzwania,
Finanse przedsiębiorstw, H. Zadora, G. Łukasik (ed.), Studia
Ekonomiczne. Zeszyty Naukowe Wydziałowe 107, Katowice:
Uniwersytet Ekonomiczny w Katowicach, 2012, p. 15-24.
[13] S. A. Lumpkin, “Regulatory Issues Related to Financial Innovation”,
OECD Journal: Financial Market Trends, 2009(2).
[14] J. Błach, “Wykorzystanie innowacji finansowych w strategii finansowej
przedsiębiorstwa”, in: Kontrowersje wokół finansów, T. Famulska, J.
Nowakowski (ed.), Warszawa: Difin, 2010, pp. 326-330.
[15] P. Tufano, “How Financial Engineering Can Advance Corporate
Strategy“, Harvard Business Review, January-February 1996, pp. 136-
146.
[16] M. H. Miller, “Financial Innovation: The Last Twenty Years and the
Next“, Journal of Financial and Quantitative Analysis, vol. 21, no. 4,
December 1986.
[17] Report on the condition of Polish banks in 2014, KNF,
http://www.knf.gov.pl/Images/RAPORT_O_SYTUACJI_BANKOW_20
14_12_tcm75-41472.pdf
[18] J. Błach, “Enterprise Risk In Terms of Innovative Financial
Mechanisms”, in: Finansowe uwarunkowania rozwoju organizacji
gospodarczych, Ryzyko w rachunkowości i zarządzaniu finansami, J.
Turyna, J. Rak (ed.), Warszawa: Uniwersytet Warszawski, 2013, pp. 47-
59.
@article{"International Journal of Business, Human and Social Sciences:70808", author = "Joanna Błach and Anna Doś and Maria Gorczyńska and Monika Wieczorek-Kosmala", title = "Financial Innovations for Companies Offered by Banks: Polish Experience", abstract = "Financial innovations can be regarded as the cause
and the effect of the evolution of the financial system. Most of
financial innovations are created by various financial institutions for
their own purposes and needs. However, due to their diversity,
financial innovations can be also applied by various business entities
(other than financial institutions).
This paper focuses on the potential application of financial
innovations by non-financial companies. It is assumed that financial
innovations may be effectively applied in all fields of corporate
financial decisions integrating financial management with the risk
management process. Appropriate application of financial
innovations may enhance the development of the company and
increase its value by improving its financial situation and reducing
the level of risk. On the other hand, misused financial innovations
may become the source of extra risk for the company threatening its
further operation.
The main objective of the paper is to identify the major types of
financial innovations offered to non-financial companies by the
banking system in Poland. It also aims at identifying the main factors
determining the creation of financial innovations in the banking
system in Poland and indicating future directions of their
development.
This paper consists of conceptual and empirical part. Conceptual
part based on theoretical study is focused on the determinants of the
process of financial innovations and their application by the nonfinancial
companies. Theoretical study is followed by the empirical
research based on the analysis of the actual offer of the 20 biggest
banks operating in Poland with regard to financial innovations
offered to SMEs and large corporations. These innovations are
classified according to the main functions of the integrated financial
management, such as financing, investment, working capital
management and risk management.
Empirical study has proved that the biggest banks operating in the
Polish market offer to their business customers many types and
classes of financial innovations. This offer appears vast and adequate
to the needs and purposes of the Polish non-financial companies. It
was observed that financial innovations pertained to financing
decisions dominate in the banks’ offer. However, due to high
diversification of the offered financial innovations, business
customers may effectively apply them in all fields and areas of
integrated financial management. It should be underlined, that the
banks’ offer is highly dispersed, which may limit the implementation
of financial innovations in the corporate finance. It would be also
recommended for the banks operating in the Polish market to
intensify the education campaign aiming at increasing knowledge
about financial innovations among business customers.", keywords = "Banking products and services, banking sector in
Poland, corporate financial management, financial innovations,
theory of innovation.", volume = "9", number = "9", pages = "3076-10", }