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This paper deals with the formulation of information systems strategy in the banking industry of Russia. This application presents a number of challenging issues. They are due to two main reasons: the recent turbulence in banking business in general; and the inherent features of the transition of a former administrative command system to a market economy. The paper gives a brief review of recent banking trends in Western countries, in an attempt to clarify the major competitive forces, outlines the main issues of the banking environment in Russia and attempts to assess the implications of economic reform in the banking sector. A generalized banking business architecture is drawn, and the information system needs of this architecture are discussed. Independent information system applications are proposed, and the particular needs of Russian banks, in terms of decentralization and application distribution, are illustrated.