Prace Naukowe Uniwersytetu Ekonomicznego we Wrocławiu 65/2. Four years of tax levy on certain fi nancial institutions in Poland – implications for the banking sector
The emergence of innovative financial services is having a huge impact on
competition in the banking services market. The aim of the article is to show, from a dynamic
perspective, the foundations of a model of competition occurring in the banking world
between traditional financial institutions and fintechs. A dynamic two-sector model of
competition is proposed with built-in feedback mechanisms in the form of demand side
economies of scale. The model shows changes in market shares after a challenger enters a
bank’s market with a portfolio of services as substitutes for the bank’s product offer. The
traditional and new entities do not adjust the scope of their products over time, instead
competing using those already available. The model obtained three economically significant
steady states. Further analysis of the time path showed that the sector is heading towards an
oligopolistic market structure in which both entities stabilize their market shares. However, in
the event of low initial market penetration by traditional banks, a new innovative entity (a
challenger bank) will completely dominate the sector, creating a monopolistic market
structure.
Autor: Praca zbiorowa
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