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DOI: https://doi.org/10.30525/2256-0742/2022-8-1-134-147
THE ESSENCE OF THE DEPOSIT BEHAVIOR OF HOUSEHOLDS AND FEATURES OF ITS FORMATION IN THE CONDITIONS OF TURBULENT DEVELOPMENT OF THE FINANCIAL SERVICES MARKET
Olena Tarasenko1, Maksym Dubyna2, Olha Popelo3
Abstract. Financial resources of households in most developed countries are the largest in volume, stable in terms of the development of the financial services market and economy as a whole. It is the development of the mechanisms for attracting these funds from economic entities, knowledge of the process of making financial decisions, is an important and integral part of forming a solid foundation for sustainable economic development. Accordingly, conducting research in this area is relevant and necessary. Thus, theoretical and methodological provisions for the formation of deposit behavior of households in current changing conditions of the financial services market is the subject of this research. Within the study, a range of classical scientific approaches is used. The following general and special research methods were used, namely: analysis, synthesis, content analysis, system approach and method of logical generalization, process approach, etc. Methods of graphic visualization of research results were used as well for better presentation. The purpose of the article is to study the nature and features of the formation of deposit behavior of households in the financial services market in terms of its transformation. Thus, as a result of the study, within the article, a detailed analysis of the essence of deposit behavior of households is carried out, and the author's concept of the interpretation of the following categories "deposit behavior', "deposit behavior of households" is formulated. The article identified and systematized the main factors influencing the formation of this type of behavior; these factors are divides into groups: endogenous and exogenous. The detailed consideration of the formation process of deposit behavior of households in the financial services market allowed to identify the main stages of its formation and to describe their features. It is established that the process of reflection of economic entities plays an important role in the formation process of deposit behavior of households, which highlighted the need to deepen theoretical issues of this direction. Accordingly, the essence of financial reflection is specified, the specific features of the implementation of reflective management of the formation process of deposit behavior of households in the financial services market is considered.
Key words: behavior, deposit behavior, household deposit behavior, reflection, reflective management, financial services market.
JEL Classification: D14, G21
1. Introduction
Households play a key role in building the national economy, especially in the formation and development of the financial services market. These economic
Corresponding author:
1 Chernihiv Polytechnic National University, Ukraine E-mail: prokopenkolena22@gmail.com
ORCID: https://orcid.org/0000-0003-0701-933X ResearcherID: F-8771-2014
2 Chernihiv Polytechnic National University, Ukraine E-mail: maksim-32@ukr.net
ORCID: https://orcid.org/0000-0002-5305-7815 ResearcherID: F-3291-2014
3 Chernihiv Polytechnic National University, Ukraine E-mail: popelo.olha@gmail.com
ORCID: https://orcid.org/0000-0002-4581-5129 ResearcherID: I-8572-2016
entities have the ability to generate significant amounts of financial resources that can be attracted on a long-term basis to ensure sustainable development of the national economy.
Transformation of savings into credit and investment funds through the indirect role of financial institutions allows to create internal financial resources for stable, gradual and secure economic development of the state. However, in a significant number of countries there are no proper conditions for the outlined transformation, respectively, financial resources of households are not always fully involved in the financial market, which complicates the development of the national economy, forming its dependence on other sources of financial resources.
In Ukraine today, households do not play the role in the country's economy that these entities play in the developed advanced countries of the world, where such entities are primarily the main investors in the national economy. A significant number of negative factors of the social, political, historical, economic nature, which affect the processes of the formation of household savings, contributed to the decline in public confidence in financial institutions. This, in the end, led to the creation of the irrational models of the deposit behavior of households, their tendency to save without transferring such resources to the use of financial institutions.
It is the presence of irrational actions of citizens in the financial services market, including the deposit services market, that leads to the creation of unfavorable conditions for intensifying the economic development of the country. Accordingly, these issues need their own study, scientific substantiation in order to find new mechanisms, ways to form models of the rational deposit behavior of households. This can be implemented only through the deepening of theoretical, methodological and applied provisions of the financial services market, the formation of this type of behavior in different conditions of economic development.
2. Literature review
Features of the formation of the deposit behavior of households is an extremely important area of research. Among the leading scientists of the national and foreign importance, who have devoted their publications to various aspects of the financial market, the following ones should be noted: Bublik E.A. (2012), Demian B., Burlutskyi S. (2014), Fedyshyn M.F., Abramova A.S. (2019), George A., Akerlof amd Robert J. Shiller (2015), Grigoras-Ichim C.E., Cosmulese C.G. (2018), Ilchuk V.P. (2014), Kahne-man D. (2011), Kholiavko N., Grosu V. (2021), Kopylov A.A. (2011), Kosach I. (2019), Loma-chynska I.A. (2011), Marhasova V., Garafonova O. (2020), Prokopenko V. (2018), Shamanska O. (2014), Shevaldina V.G. (2012), Shkarlet S.M. (2016-2017), Smirnov O.Yu. (2006), Taleb Nassim Nicholas (2010), Thaler Richard H. (2015),
Tkalenko N.V. (2011), Vlasenko O. (2015), Zatonatskiy D. (2021), Zhavoronok A. (2021), Zhuk O.S. (2018), and others.
The main results of the research (2) show that increasing concentration, lowering the interbank interest rate, disinflation, increasing the bank's capitalization and re-ducing the bank's liquidity have a significant impact on the lowering interest rates on deposit products in the Slovak banking sector. The authors prove that the high-capitalized banking sector has a lower transition to deposits. Scholars argue that in the context of a market rate, the deposit rate of the highly capitalized banking sector should also decrease, and this decrease should be higher than the reduction of the market rate (Gavurova, Kocisova, Rozsa, Halaskova, 2019).
The authors investigated that Deposit Reimbursement Schemes (DRS) are basi-cally a combination of two instruments: a tax on the purchase of a certain product and a subsidy for a separate collection of the same product at the stage of its use. Scientists believe that the DRS efficiency in terms of further processing is higher in cases where current processing rates are relatively low (Linderhof, Oosterhuis, van Beukering, Bartelings, 2019).
The aim of the article is to study three categories of household deposits in 15 eurozone countries. Scientists analyze the data at the household level and apply a logit model. The researchers concluded that the impact of the well-being and socio-demographic characteristics of households on their propensity to own deposits was the opposite of guaranteed and non-guaranteed deposits (Kochaniak, 2019).
The study is based on the assessment of the withdrawals' extent from house-hold deposits. The authors analyzed the importance of high value deposits for individual populations and indicated those in which sediments were the most frequent (Kochaniak, 2018).
The purpose of the researchers' article is to study the impact of the revocation of licenses on the degree of the household confidence in banks and reduce their incentives to make deposits. The authors investigated that a slight positive effect from the closure of bank branches due to the revocation of licenses for retail deposits is relevant (Vasilyeva, Novopashina, 2018). In the article, the authors study the dynamics of deposits in Russia, as well as identify the risks of reducing the volume and structure of deposits. Researchers have developed an approach to calculating liquidity ratios and determining a stable part of banks' liabilities based on the use of the household deposit portfolio (Trofimov, 2017).
The main idea of the research is to analyze the understanding of the fintech landscape in Indonesia, which, according to the authors, is characterized by
a het-erogeneous, dynamic and developing network of organizations and innovative mechanisms to increase the scalability of financial services. It is found within the study that the mechanisms of platforming, decentralization, localization and democratization by fintech platform operators have a positive effect on the scale of financial services and financial behavior of households (Muthukannan, Tan, Chiang, 2021).
The aim of the authors' work is to empirically determine the impact of finan-cial development on trade in services. Researchers use three proxies to measure fi-nancial development: financial system deposits, liquid liabilities and private loans. After statistical tests and reliability tests, the authors investigated that financial development has a positive impact on trade in services in Central and South America, but does not have a significant impact in Asia and Africa (Jiang, Khan, Zaman, Iqbal, 2021).
Researchers have studied the preconditions for the emergence and use of fi-nancial convergence by participants in the global financial services market to provide additional competitive advantages and sustainable development by changing the established order in the financial market sectors. The authors consider practical ways to determine the existence of financial convergence, based on a modern approach using the methodology of calculating sigma convergence (Rysin, Galenko, Duchynska, Kara, Voitenko, Shalapak, 2021).
According to the authors, in today's world, financial services are developing most intensively in the field of electronic payments. The article is based on the analysis of the development of the financial services market in Ukraine, identification of problems and prospects for the development of this market. Considering the prospects of further research, the authors emphasize the further study of the development of financial technologies in the financial sector, transactions with bankcards and electronic money in Ukraine (Roshylo, Kovalevych, Gut, Ventsel, Berdar, 2020).
3. The essence and the features of the formation of the deposit behavior of households
Let's start the study by considering the essence of the category "deposit behavior of households". It should be noted that the outlined type of behavior, as well as the financial behavior of all economic entities that use financial services, is directly related to the ongoing process of making appropriate decisions on the use of their own financial resources. However, such processes occur in an environment of constant influence on their very significant number of factors that are formed both within the economic environment as a whole and inherent in individuals, households, etc.
It is logical to begin the consideration of the essence of the category "deposit behavior of households" with the study of the content of such definitions as "deposit behavior", "household". In Figure 1, the author's approaches to the analysis of the outlined categories are presented.
Please note that it is extremely difficult today to study some features of the behavior of economic entities within the national economy, including the financial services market due to the lack of necessary analytical data, the presence of a significant number of different models of economic models, including financial, the deposit behavior, and insufficient development of methodological tools for such research. However, it can be unequivocally stated that behavior is a generalized category for describing the actions of a particular subject in a given situation. In economics, which directly examines the basic economic processes of production, exchange, distribution and consumption, the behavior is primarily related to the peculiarities of the formation of interaction between entities as a result of these processes.
Thus, taking into account the specifics of deposit operations, the peculiarities of the functioning of financial institutions, the category of "deposit behavior" should be considered as follows: deposit behavior - the process of interaction with the environment about the placement of temporarily free financial resources in the temporary use of the depository institution, as it has the right to accept these resources for storage, use them at its discretion on terms of return, timeliness, payment and timeliness.
It is worth noting that, in general, a certain type of the deposit behavior is common to all economic entities that own a certain amount of financial resources that these entities can transfer to financial institutions. However, in each case, such models have their own, quite diverse features. For households as economic entities, this type of behavior is quite different from the decision-making processes for the management of financial resources by owners and management of enterprises, management of organizations, institutions, etc.
Given the specific role of households in the development of the national economy, the household's deposit behavior should be considered as a process of interaction of economic entities that carry out economic activities and have a common budget with financial institutions to place temporarily free financial resources they have, which involves the transfer of these funds in the temporary use of such institutions with the right to use them at its discretion on terms of return, timeliness, payment, timeliness, transparency and coordination of interests.
It should be noted that the behavior of households is largely determined by the social environment,
Figure 1. I he essence of the category "deposit behavior of the household"
Source: compiled by the authors taking into account (Smirnov, 2006; Thaler Richard, 2015)
I
HOUSEHOLD i
a set of individuals who cany out joint economic activities and have a single budget
ECONOMIC ENTITY owns
INTERACTION i
<--^
temporarily free financial resources
DEPOSIT INSTITUTIONS
transfers for temporary use
on conditions
payment
return
urgency
timeliness
commercial banks (private, public)
credit unions
have the appropriate license to cany oat deposit activities
transparency
-1
coordination of
interests
Figure 2. Scheme of the essence of the deposit behavior of the household
Source: compiled by the authors taking into account (George, Akerlof amd Robert ]. Shiller, 2015; Kahneman, 2011; Taleb Nassim Nicholas, 2010)
moral principles, and therefore, the use of the model of economic man-maximizer does not adequately reflect reality. The limitation of the rationality of the household behavior may be the difference in the desired goals (Demian, Burlutskyi, 2014). With this in mind, let's identify the main features of the deposit behavior of households, using the results of clarifying the nature of this category. These include the following: 1) the process of interaction - deposit behavior of households is a phenomenon, the formation of which is a complex process of transformation of individual attitudes to the activities of depository institutions; such behavior occurs even when a person may not have free financial resources, but already has a clear position on saving a frugal lifestyle and their own views on the transfer of funds at the disposal of other entities; 2) subjective dimension - for its formation of the deposit behavior of households it is necessary to have at least two entities: the owner of financial resources and a financial intermediary who has the opportunity to attract these funds; 3) effectiveness - deposit behavior of households is already in its content the result of interaction between two economic entities, as such behavior has already formed and exists; 4) duration of formation - the deposit behavior of households is created for a long time under the influence of various factors, worldviews of the individual, his individual attitude to financial institutions, the experience of interaction with them; 5) complexity of transformation - a long period of formation of the deposit behavior of households leads to complex processes of its transformation into its model of the rational type. Note that this behavior changes very quickly if a person wants to withdraw their own funds at some point in time. However, the formation of the long-term, optimal, predictable behavior occurs only in the long run. In Figure 2, the model of creating the deposit behavior of households as a result of interaction between the household and depository institutions is shown.
The process of forming the deposit behavior of households is quite complex. This is due to the large number of different types of households, the peculiarities of their economic behavior, and the presence of a large number of factors influencing decisions on the use of their own financial resources and the activities of financial institutions.
Some types of the deposit behavior are formed under the influence of a number of factors, among which an important role is always played by specifically specific factors that arise in the process of creating a particular type of behavior. For example, for different segments of the population, which can be ranked by income level, the factors that would affect the characteristics of the behavior of citizens are generally very similar, however, for some groups
they will be specific. For example, wealthy citizens have their own specific attitude to the implementation of savings and this directly determines their behavior in the deposit market of the country. For less protected segments of the population who do not have temporarily free funds, another model of the deposit behavior will be typical, or rather its absence. In this case, such citizens will have a certain attitude to the activities of depository institutions, which, when changing their level of socio-economic security, may affect the formation of future behavior of such persons.
It is virtually impossible to identify exhaustively specific factors that influence the formation of different types of the deposit behavior of households. It is only advisable to do this when conducting a study of a specific group of people and their attitudes to the functioning of depository institutions. However, in general, as for any complex macro-economic system, within the deposit services market it is possible to identify a list of those factors that play the greatest role in shaping the deposit behavior of households in the country. In Figure 3, a set of such factors is presented.
All the outlined factors were divided into two major groups: exogenous and endogenous. The first group included all the factors that are formed in the external environment, within which the relationship between depository institutions and their customers are formed. They were divided into political, economic and social. Endogenous factors are considered as a set of factors that are inherent in the person who decides to transfer part of their funds to financial institutions. This group includes all the personal characteristics that are inherent in each person as a separate economic entity.
It should be noted that the peculiarities of the economic environment in which depository institutions and households operate are often decisive in the processes of forming the deposit behavior of households. The experience of the development of the deposit services market in Ukraine shows that the stability of the national economy is an important and priority condition for the development of the defined market based on the rationalization of models of the deposit behavior of households.
However, ensuring the long-term sustainability of the national economy is a difficult task for many countries. Thus, the financial services markets in such countries are developing in a rather turbulent environment, characterized by periodic crises, which are often due to deeper economic and political transformations within the global financial system.
Turbulent development of the financial services market significantly complicates the processes of formation of the deposit behavior, especially in households, and often leads to a radical decline in their confidence in the functioning of depository
institutional
Exogenous factors are factors that arise
and operate within national and world economic systems. Individual entities do not have the ability to influence such factors, but can only take them into account in the decision-making process for further investments.
FACTORS OF FORMA TION 1 OF DEPOSIT HOUSEHOLD \ BEHAVIOR
Endogenous factors are factors that arise and influence the behavior of a particular individual or group of individuals within a single household. Such factors are formed during a person's life, partly depend on his mental perception of the world.
Figure 3. Factors in the formation of the deposit behavior of households
Source: compiled by the authors based on the study (Kopylov, 2011, p. 65; Lomachynska, 2011, p. 172; Shamanska, 2014, p. 109; Shevaldina, 2012, p. 315)
availability of temporarily free financial resources that can be attracted
level of financial literacy of households
experience m using deposit services
features of the model of economic
behavior implemented by the
household (consumer, savings)
age of the owner of financial resources
the level of education of the owner of financial resources
the level of financial confidence in depository institutions
residence
institutions, the level of which is restored for a long time. Accordingly, the national economy is losing in the long run the financial resources of households, the volume of which is rapidly declining, which affects the increase in the cost of borrowed funds, complicating the financial condition of banking institutions.
The reasons for the formation of a turbulent environment for the development of the financial services market may be the following: political instability and radical changes in the political landscape; high dependence of the country's economy on the world markets for goods, products and raw materials; low level of gold and foreign exchange reserves; low quality of institutional support for the functioning of financial institutions; a significant economic downturn in the country, which leads to macro-financial instability; ineffective monetary policy, and other reasons.
Conducting research in the field of determining the behavior of economic entities is important to understand the peculiarities of the deposit market, as its entire algorithm is based on trust between consumers and producers of deposit services. Trust is a part of a person's behavior, a factor that influences his further actions and intentions to transfer his own funds to financial institutions. This only confirms the importance of analyzing the whole process of origin and transformation of the household behavior in open economic systems. In Figure 4, a diagram of the process of formation of this type of behavior is presented. Let's consider its essence in more detail.
First of all, the initial condition for the emergence of deposit relations on the basis of already formed a certain model of deposit behavior is the availability of a particular person's free financial resources, which he already wants to transfer for temporary use to a financial institution. In this case, the person is often unaware of the process of reflection, i.e. self-consideration of the need to invest, the amount of potential contribution and planning the expected results of such actions (stage 1 - reflection and decisionmaking on the contribution).
If the investor decides not to invest at all, the idea of buying a deposit product was situational and temporary. At this stage, the process is pre-behavioral, when a person reflects on certain possibilities and decides how to proceed. As a result, a decision is made on further action.
With a positive decision on the feasibility of opening a deposit account, the future client of the financial institution begins to explore existing opportunities for deposit, assess potential income, risks, analyze the overall market of deposit services (stage 2 - analysis of existing deposit products). Quite often the outlined is not carried out, and the decision is made situationally or on the basis of opinions of other persons who can share own experience of interaction with that, or other
bank or credit union. The number of factors influencing both the decision on the feasibility of investing in a depository institution and the choice of such an organization is significant and it is virtually impossible to quantify their impact on people.
As a result, a person chooses a depository institution and buys a deposit product (stage 3 - choosing a financial intermediary and the appropriate type of deposit). At the time of the funds transfer to the depository institution, it is possible to state the existing model of deposit behavior of the household, as it is possible to clearly define the relationship to the deposit currency, its term, the depository institution (state bank, foreign banks), etc. (stage 4 - concluding a deposit agreement). The availability of this information makes it possible to describe the behavior of a particular person and his attitude to the functioning of financial institutions (stage 5 - transfer of own financial resources to banking and non-banking institutions; stage 6 - expiration of the deposit agreement, refund with interest to their owner).
However, if we take a closer look at the process of forming the deposit behavior of households, it becomes clear that certain actions (and this is part of the phenomenon of behavior) a person begins to perform before the start of the deposit relationship. The choice of banking institution, product, consideration of the potential benefits and risks of non-refund, all this is already beginning to shape the very behavior and personal attitude of the person to the savings process. That is, even in the early stages a person gradually makes decisions about the appropriateness of the contribution and thus already determines certain aspects of their own behavior. However, there is no interaction with depository institutions at this stage. It is, given the specifics of the deposit behavior of households, in our opinion, it is appropriate to distinguish two stages of formation of such behavior: 1. Pre-behavioral - a stage of reflection on the feasibility of making savings and transfer them for temporary use to depository institutions. At this stage, the process of forming the future model of the deposit behavior of households, which occurs as a result of the influence of a significant number of different factors. 2. Behavioral stage - the process of interaction between the owners of financial resources and depository institutions, during which a specific type of a model of the deposit behavior of the household is formed.
4. The role of reflection in the formation of the deposit behavior of households
As already mentioned, the process of formation of the deposit behavior of households is complex and depends on many factors, which are difficult to identify and analyze, and sometimes impossible, given
Figure 4. Scheme of the process of formation of the deposit behavior of households in the financial services market
Source: compiled by the authors taking into account (Vlasenko, 2015)
the rapid emergence of such factors, their short-term impact, but significant consequences for the financial services market. Especially knowledge of the process of formation of the deposit behavior of households is complicated by the fact that among the outlined factors, informal institutions, institutions formed in society play an important role, and assessing their impact from an analytical point of view is extremely difficult. However, it is possible to learn theoretical aspects of the impact of such factors, to analyze the peculiarities of their origin and development in the consideration of the deposit market as a holistic macroeconomic system.
Understanding and using the principles and motives of the investors' behavior, which are determined by the sum of their psychological attitudes (such as confidence, propensity to consume, liquidity benefits), expands the ability to effectively manage significant demand and investment resources accumulated by the population (Bublik, 2012, p. 37).
A special role in shaping the deposit behavior of households in the first Pre-Behavioral Stage is played by the processes of reflection and decision-making on the use of their own financial resources by these entities. Accordingly, reflection, which is inherent in households at this stage, is one of the key processes, which is an integral part of creating a model of appropriate behavior.
Issues of reflection of citizens in the field of savings are becoming important, because at this stage through the use of specific tools it is possible to influence the decision-making process to obtain the expected results in increasing the amount of funds accumulated by financial institutions. Understanding the factors that have the greatest impact on making positive investment decisions allows you to partially manage and regulate such processes. This can be done only if research is conducted in this area.
Reflection is an integral part of shaping the economic behavior of households in general, as it is an objective process that is inherent in everyone. Economic reflection is an important component of knowledge of the individual subject of economic processes and patterns of the society's development in which it operates and develops. In particular, due to reflective processes, a person of chance makes decisions about their own economic actions, which is important from the standpoint of knowledge of such actions and understanding of the mechanisms of influencing such a process to obtain the desired result.
In the financial sphere, it is appropriate to consider the process of financial reflection as one of the cases of economic reflection. This type applies to more reflective processes that involve household decisions about the appropriateness of using financial services. Let's consider in more detail the essence
and features of the process of financial reflection. In Figure 5, the theoretical platform for the existence of this type of reflection is substantiated.
The relationship between financial institutions and their potential customers is based on the motives for participating in such relationships. They are different for each party, but they are quite similar in nature. The process of financial reflection involves deciding on the continued use of financial resources held by an individual or a business entity. This type of reflection should be understood as follows: financial reflection - the process of learning based on the worldview of the individual features of financial institutions, thinking about possible use of their services, which based on active use of observation, analysis and evaluation leads to individual decision to interact with such institutions in the future. Financial reflection is a process of analyzing the information that a person has at a particular time and based on which makes decisions about further action using their own temporarily free financial resources.
Financial reflection as a separate phenomenon is characterized by certain characteristics and features that distinguish this type of reflection from other types (Figure 5). However, there is also a set of features that are common to this type of reflection and other types.
The following features are typical for reflection on the deposit services market: 1) the important role of experience in the decision-making process on the transfer of own funds to financial institutions; 2) significant influence of informal factors on the decision-making process in the field of savings (trust, beliefs, education, profession, religion, experience of others, etc.); 3) the need to choose between higher income and greater risk, which requires consideration of the possible consequences of a particular decision; 4) mandatory availability of temporarily free financial resources at the disposal of an individual who reflects on the options for their use; 5) the need for alternative ways of investing within the financial services market, which creates potentially different areas of their use; 6) the existence of a certain level of information vacuum on the activities of financial institutions, objectively insufficient level of information transparency of their activities, which does not allow to clearly and comprehensively determine the level of risk of loss of own funds transferred to financial intermediaries.
Given the outlined features of financial reflection, its nature and features of manifestation within the deposit services matket, it is advisable to create such conditions for the operation of depository institutions, the introduction of which would correct the deposit behavior of individuals by external influence on the reflection process. This, in turn, by increasing the pressure on individual motives and beliefs of
methods of influence -
I
ways of influence
Z3*-
occurs under pressure
motives
I
!INFLUENCE
yf
Subject 1
ll interaction
financial relationships i :
¡^interaction^,
Subject 2
UNFLFENCEi
§ s
i an
motives
active formation of deposit, credit and investment resources
stable development of the financial services market, increasing the pace of its operation
formation ofpredicted behavior of economic entities
formation behavior patterns
implementation leads TO
the emergence of irrational behavior of subjects, the formation of herd behavior
formation of unpredictable and difficult to predict events and phenomena
formation of opportunistic behavior of subjects
positive processes
negative processes
FINANCIAL REFLECTION
I
the process of learning based on the worldview of the individual features of financial institutions, thinking about the possible use of their services, which based on the active use of methods of observation, analysis and evaluation leads to individual decision to interact with such
institutions in the future
FEAT fURES
inherent in financial relations conditionality of individual traits of the consumer of financial services
arises within the components of the financial system, which are characterized by periodic instability, instability and turbulence requires a significant amount of information about the subjects of financial relations, which allows to draw conclusions and on their basis to form further actions
objectively existing asymmetry of information transfer of ownership of financial resources
Figure 5. Theoretical platform for the existence of financial reflection
Source: compiled by the authors taking into account (Ilchuk, Dubyna, Prokopenko, 2014, p. 145)
the individual, may increase his propensity to make savings and transfer them to financial institutions. In this case, there is a need to study the issues of reflective management and the peculiarities of its implementation within the deposit services market.
Reflective management in its content is a process of influencing the transformation of the deposit behavior of households in order to increase their willingness to transfer their own financial resources to depository institutions. Reflection is an integral part of the formation of the behavior of the business entity, including the deposit behavior of households.
Reflective management as a separate type of management always involves the presence of the subject and object of management. Unlike other types of management, in reflection the subject is the body, the system that influences the object of reflection -the individual whose behavior must be transformed in a certain direction. Within the deposit services market, the objects of reflective management are potential and existing clients of financial intermediaries, and the subjects should include public authorities and partly depository institutions (Figure 6).
The specifics of reflexive management as a category allows us to identify certain types of such management and identify their basic characteristics: macrosystem (significant coverage of consumers of financial services; an important role of public institutions; continuity of implementation; long-term results); microsystemic (subjective conditionality; periodicity; customer orientation; obtaining short-term results), and justify that each of these types of management has its own range of methods and tools that should be used to influence the deposit behavior.
For large macroeconomic systems, reflective management has its own characteristics, as it affects a wide range of actors that are part of such a system. However, during this process, the conditions of its other components always change. Within the deposit services market, in order to increase the propensity of individuals to make savings, public authorities must change not only the general economic indicators of the national economy, ensure a certain level of stability, but also transform the activities of financial intermediaries, strengthen their sustainability requirements and promote improving the system of consumer protection in the financial services market, etc.
Within the deposit services market, reflective governance should be aimed at changing the perceptions and attitudes of the household towards savings. This can only be achieved by transforming the functioning of financial institutions and ensuring stable conditions for the country's economic development (first of all, preventing critical devaluation and inflation processes). In our opinion, the peculiarities of the process of reflective management within the deposit services market include the following: 1) can be carried out by public authorities, and partially implemented by financial institutions themselves, which, using marketing technologies, also influence the decision-making process of households on the use of their own free financial resources; 2) the effectiveness of reflective regulation in macroeconomic systems depends on the quality of state regulation of individual economic systems; 3) reflective management within the deposit services market is a continuous process, as it must occur constantly with periodic determination of the effectiveness of such a process; 4) reflective management is a complex structured process in which the influence of public authorities can be exercised directly on the owners of financial resources and indirectly through the implementation of measures to transform the activities of financial institutions, i.e. the impact on owners and managers; 5) reflexive management can be segmental and general; the introduction of any of these types requires the implementation of new mechanisms of influence on the process of formation of the deposit behavior
to obtain the desired result; 6) reflective management can be a partial component of the system of state regulation of financial services markets, including and in the field of deposit services. However, on the other hand, increasing the role of such management in supervising the functioning of financial intermediaries requires a shift in emphasis in the conduct of all state policy on the development of the financial services market.
Reflective management is directly related to behavioral economics, behavioral finance and its active implementation requires the use of new theoretical, methodological approaches to building a new model of state regulation of the financial services market. At the heart of this model, more attention is paid to the state's ability to change not only the external environment of financial institutions and the existence of individual clients, but also the behavior of major depositors under the influence of various exogenous and endogenous factors.
5. Conclusions
Households play an important role in the development of the financial services market, as these entities have the ability to generate temporarily free financial resources and provide them for temporary use to financial institutions. Such a process can be effective only in the conditions of the household's trust in these institutions, i.e., in the presence of the rational deposit behavior. The formation of such behavior in society is an important factor in ensuring the overall economic development.
Given the importance of these issues, the article provides a detailed analysis of the essence of the deposit behavior of households, which allowed formulating the author's concept for the interpretation of such categories as "deposit behavior", "deposit behavior of households". It is also established that this type of behavior is formed in society as a result of the influence of a significant number of factors that have been identified and divided into two groups: endogenous and exogenous. The process of forming the deposit behavior of households is a complex and continuous process, which can be detailed through the separation of individual stages, which was implemented. An important role in this process is played by the process of reflection of economic entities on the implementation of their own savings, making decisions on their temporary disposal to depository institutions. In this regard, within the article, the essence of financial reflection is analyzed in detail, the features of its formation are described. Attention was also focused on understanding the nature of reflective management and it was found that within the deposit services market it is possible to implement certain types of such mana-
The subject of reflexive control
Creating conditions for active development of the deposit services market, increasing the volume of generated deposit resources and their transformation into credit and investment fluids
Formation of credit and investment resources
Goal:
have the opportunity' to influence the decisions of economic entities through transformations of the institutional framework for the development of the deposit services market
3
-►I producti~ using
have temporarily free financial
resources and think about how to use them
0
Goal:
Increasing the financial stability of depository institutions
have the opportunity to influence
the process of reflection of households on the feasibility of investing in depository institutions
Changing the rules for providing deposit services to economic entities
information
affect
RESULT
reflect on the need to use their own cash to deposit them into accounts with depository institutions
Transforming household behavior
Preservation of own financial resources and their increase by providing temporary use to depository institutions
Formation of deposit behavior of households
Changes in demandfor deposit sen'ices and growth in accumulated savings
Figure 6. Algorithm of the macrosystem reflexive control of the formation process of the deposit behavior of households in the financial services market
Source: compiled by the authors
gement through the use of a number of specific tools by both public authorities and depository institutions.
Acknowledgments. This research is carried out within the framework of the scientific project
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"Transformation of the households' behavior in the financial services market in the context of digitalization" with the support of the Ministry of Education and Science of Ukraine.
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