Impact of Foreign Banks on Banking in Emerging Economies Essay Example for Free

Impact of Foreign Banks on Banking in Emerging Economies EssayIncreased technology and innovationInternational banking in uphillmarket have some advantages from the technology and innovation. The advanced technology and innovation system could even surpass the conventional technology and innovation. For example, they could improve productivity, add in market and increase the competition and so on . Innovations in customer experience and superior customer service delivery, network integration. (Infosys 2000). For example, the internet and estimator system have a useful communication system to connect the consumer and bank. In daily life, customer often use the mobile phone, computer murder the money. At the same time, innovation and technology is a lower cost of the banking system in the emerging market. The increased technology and innovation in emerging market may help the banking system make a clear communication for their employee, sh atomic number 18holder and consumer. A s a result, banks in emerging markets are leapfrogging their rich-world rivals in efficiency, technology and innovation (special report outside(a) banking 2011).Increased liquidity and solvencyComparing with the local banking system, the overseas banks on banking in emerging market have antithetical kind of comparative advantage. The reason is emerging market allow foreign bank entry to local market. This is lead to the higher liquidity and solvency. Foreign level investment is a useful fund source for local market. At the same time, the foreign banks also have important roles which represent a borrower. For example, foreign banks have an enough capital base and asset. Foreign banks have played a major role in financing emerging market (EMEs) in recent year. Increased liquidity and solvency has helped emerging markets to develop their economies and allocate capital and financial know-how efficiently across countries (Agustn Villar )Disadvantage Complex global policies and challe nges global banking There are some negative factors occur in global banks in emerging economies. One of the important factors is complex global policies. For example, the foreign banks are an extension of parent bank which sent to managers to overseas. Different banking system has different policies. Meanwhile, the government also comes up with stricter policies. As a result, foreign banks should face a lot of complicated policies in emerging market. The collapse of Barings was a demonstration of how different countries supervisors are failing to communicate with each other.( the economist 1997). This opinion shows that the international banking in emerging market should have a closer supervisor.