take into account that digitalization of banking is not a new phenomenon ; it has been present for more than 3 decades ( in the form of automated teller machines, electronic payments, e - banking ). the emergence of fintech is only the latest wave of innovation to affect the banking industry. still, in the last decade, a significant change has occurred in the way of using technology, thus creating environment in which disruption can happen more quickly, and urging traditional banks to adjust faster to maintain market share. besides the advancement in technology, a few other factors have also contributed to proliferation of financial innovation. the fact that banking industry was dealing with the legacy issues of the global financial crisis - impaired balance sheets, perhaps was important factor that provided space for non - banks to penetrate in financial business. also, banks ’ resources to a great extent were tilted towards implementation of the new basel 3 requirements aimed at increasing the resilience of the banking system. the increased competitive pressure has been further amplified with the regulatory changes in the payments segment - psd2, such as elimination of barriers to entry for third parties by providing access to data and accounts of the customers in the banks – so called “ open banking ". according to the research by pricewaterhousecoopers 2, banks have very firmly moved from viewing open banking as a compliance exercise to an opportunity to compete, innovate, and deliver value and more than 33m people are expected to have signed up to open banking driven services by 2022. against these background many fintech firms, that are not regulated entities, have launched new, differentiated and tailor made products, putting a significant pressure on traditional financial institutions. very important factor that most probably will shape the future of the traditional banking industry is the way how traditional banks approach and embrace the financial innovations, be it directly on their own or through cooperation with new fintech companies. not only will fintech companies try to behave like banks, but banks will also try to behave like fintechs. while some market observers estimate that a significant portion of banks ’ revenues, especially in retail banking, is at risk over the next 10 years, others claim that banks will be able to absorb or outcompete the new competitors, while improving their own efficiency and capabilities. in this context, the bis envisages 5 different scenarios on how the fintech explosion might impact banks that range from a scenario where the incumbent banks digitize and modernize themselves to retain the customer relationship and core banking services, lever

citizens in the banking sector, which remained stable, sound, highly capitalized and liquid throughout the entire period, showing high capability for successful handling of shocks. higher growth in the denar deposits and the acceleration of growth of the long - term savings is especially positive, which strengthens the banks'capacity for long - term placements and the support for investment projects. the deposit growth provided a solid basis for increase in the lending activity and deepening of financial intermediation2 by around 8 p. p. in the past ten years to the level of 48 % of gdp in 2017. however, despite the positive trends, the need for further increase in the total domestic savings is evident, which is a common feature of the cesee countries. thus the imf analysis of may 20163 mainly indicates " insufficient " domestic savings4 in cesee countries, i. e. the average savings rate ( as a difference between gross domestic product and consumption ) of about 20 % of gdp, which is lower than the current investment rate, lower than the estimated optimal rate of investment ( 25 % of gdp ), as well as the rate in countries with a relatively faster process of real convergence in the past ( 28 % of gdp ). the rate of total domestic savings is particularly low in 1 / 3 bis central bankers'speeches the see countries, where in 2017, on average, it is 17 % of gdp, including in the republic of macedonia where it is close to the average in the region. the relatively low domestic savings are an obstacle for stronger investment support, partly explained by the fact that, even after more than 25 years from the beginning of the transition, the level of accumulated capital per capita in most cesee5 countries is still relatively low, corresponding to about one - third of the levels in developed european economies. in rm the capital level per capita is lower than the average of the eu - 28 countries, and it equals around 24 %. moreover, as in most countries, even in our country the gap is deeper in the part of the private accumulated capital than in the public capital. however, according to the dynamics, a characteristic of the macedonian economy is that, unlike most of the economies in the region which registered significantly reduced investments ( an average of about 10 p. p. in gdp ) in the post - crisis period, until 2017 in our country their share registered an increase. this was underpinned by the stable inflow of foreign direct investment, the country's investments in