This article reveals the features of the influence of innovation processes on the transformation of financial services, contains the principles of financial innovations, presents a classification of financial services in terms of provided services segments. There are highlighted problems in the functioning of banks in the modern banking ecosystem and presented the possibilities for transforming the patterns of their activities. The possible risks associated with the innovation activities of banks are detailed analyzed, and the general aspects of their regulation are presented. Keywords-innovation; banking services and products; innovative banking products; fintech; financial technologies I. The total global investment in financial technology in 2018 amounted to about 111.8 billion dollars, actually doubling compared with the previous year ("Fig. 1").

This paper investigates the distribution of relative credit losses given mortgage default for loans provided by a major government-sponsored creditor in a local area. We use borrower's individual and loan-level data on residential mortgages originated in the period 2008-2012. Our numerical analysis indicates that mortgages bunching at certain Loan-to-Value ratios (LTV) led to a discontinuity in relative credit loss given mortgage default. Through regression analysis, we demonstrate discrete jumps in the approximated historical credit losses generated by loans with a high LTV ratios and find thresholds allowing the segmentation of loans according their credit risk. In addition, our results suggest that mortgage insurance is a potentially valuable instrument for compensation for expected loss in certain risk segments.

No abstract