Impact of Foreign Banks on Banking in Emerging Economies Essay

Increased technology and innovationInternational banking in appearmarket have some advantages from the technology and innovation. The advanced technology and innovation strategy could even surpass the conventional technology and innovation. For example, they could improve productivity, increase in market and increase the competition and so on . Innovations in customer finger and superior customer service delivery, network integration. (Infosys 2000). For example, the internet and computer system have a useful communication system to connect the consumer and bank. In insouciant life, customer often use the mobile phone, computer transfer 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, stockholder and consumer. As a result, banks in emerging markets be leapfrogging their rich-world rivals in efficiency, technology and innovation (special report international banking 2011).Increased liquidity and solvencyComparing with the local banking system, the unknown banks on banking in emerging market have different kind of comparative advantage. The reason is emerging market allow opposed bank entre to local market. This is lead to the higher liquidity and solvency. Foreign direct investment is a useful fund source for local market. At the same time, the foreign banks likewise have important roles which represent a borrower. For example, foreign banks have an enough capital base and asset. Foreign banks have played a study 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 challenges international 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.