Identification of threats to financial institutions’ economic security as an element of the state financial security regulation

Abstract

Government structures should start financial security regulation at the macro-level with the definition of a list of threats, which impact on participants in the financial market can destabilize their activities and lead to negative trends in the financial system functioning and development. The state of financial security of a country depends on the level of economic security in its financial sector. Unstable and unprofitable work of financial institutions poses a threat to the state financial security because it means the inability to fully meet the financial interests of the population and business structures. Therefore, it is important to establish a list of factors that can have a negative impact on their economic security level. The research objective is to establish a list of external, hybrid, and internal threats to financial institutions’ economic security for the purposes of regulating the state of financial security of the state. For obtaining scientific results, the monographic method and the method of theoretical generalization were used in the article. On the basis of research materials of such scientists as Baranovsky O., Bovsunovsky G., Vovchenko R., Gladkikh D., Furman V., Gallagher H., Makmakhon V., Morrow R., De Oliveira I. S., Stickings A., Elliot D., Matanda E., Adrian T., Liang N. we systematized a list of hybrid and internal threats to financial institutions’ economic security. In the paper, we used analysis techniques to establish trends in the number of bank and non-bank financial institutions in Ukraine during the last four years (2014, 2015, 2016, 2017). A list of internal threats to financial intermediaries’ economic security has been generated while using information, obtained through comparing data from the survey and questionnaire of respondents – experts in the field of financial institutions economic and financial security management. Top management representatives of various types of professional financial market participants were interviewed during 2015, 2016, 2017; their answers have been analysed and the most significant threats to the normal functioning of the financial sector, and hence to the state financial security, have been identified. It is established what threats to financial institutions economic security, and as a consequence, to the state financial security, can be called traditional ones. Hybrid threats to the Ukrainian financial market and its participants are systematized. The internal threats to the economic security of financial institutions are specified. Thus, the range of threats to the state financial security, the origin of which is the professional activity of economic entities in the financial market, is found out. Today, financial institutions are characterized by a large number of traditional and new threats to economic security, which they should learn in order to cope with because without this action their stable work will be impossible and it will also reduce the level of the country financial security. The list of threats found in the study can be used as an informational basis for the development of state strategies for ensuring the financial security of the state over the next five years. For the first time since gaining independence, Ukraine is experiencing a period of financial instability associated with military actions and the crisis of political power. To traditional threats to economic and financial security at the micro and macro levels, their new variations are added. They can only be detected in a timely manner by an expert in the field of security science and by a specialist in the practice field of managing a financial institution. The result of this study is a synergy of theoretical and practical specialists’ efforts towards the search for effective approaches to the regulation of the state financial security through the threat-oriented management of financial institutions.