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Ukrainian FinTech is very much alive and kicking #StandwithUkraine

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I have spent time in Ukraine and Russia in the past, and live next to the borders (my base is Warsaw these days). It has been a challenging time and so I reached out to Rostyslav Dyuk ...

... Chairman of the Board at the Ukrainian Association of FinTech and Innovation Companies (UAFIC) to give me a report from the ground about what has been happening. Here is his insight.

Ukrainian fintech: a month of resistance to Russian aggression

It is impossible to be ready for war. We at the UAFIC planned to hold the 4th International Digital Lending Conference on February 25, to present the Fintech Catalog 2021 and hold the first-ever FinTech Awards in the history of the industry. Instead, on February 24, Russian troops invaded Ukraine, and UAFIC launched a fintech resistance in which many initiatives were implemented.

War is always harming the financial sector. However, thanks to the wise decisions of the NBU (National Bank of Ukraine) and the speed of reactions of banks, the Ukrainian financial system survived. One of the most negative factors was a significant reduction in demand. According to the UN, more than 5 million people left Ukraine. Another 10 million have become internally displaced and had to leave their homes. For a country with a population of 44 million people, that is a massive change.

With a third of our population forced to move, the demand and velocity of money inside the country have decreased significantly. Cash flows were directed only to basic needs and assistance to the army and volunteers. The National Bank transferred more than UAH 12.9 billion (around $450 billion) to the military from a special account created for donors. The state continues to develop e-support services, such as receiving financial assistance on a virtual card, and new eGov services. All this contributed to an even greater digitalization of society than in the days of COVID-19. The effect will be especially noticeable after the end of the war, when digital inclusion and readiness for cashless services will allow Ukraine to make another leap, instead of a gradual evolution in the digitalization of finance.

As I have already mentioned, the banking system continues to operate, despite hostilities in most of Ukraine. Banks support the operation of branches where possible, ensuring uninterrupted cashless and online transactions. The largest Ukrainian banks have abolished non-cash payments during the war, which is an important step in supporting the market for non-cash payments in martial law. Also, most Ukrainian banks have introduced credit vacations. For clients - both individuals and businesses - such a break in settlements with the bank is extremely important support.

However, the war hit hard on fintech providers. It happened due to significant demand cuts and even killed industries, such as digital lending, due to the incredible increase in risks and the introduction of some necessary wartime legislative initiatives.

We at UAFIC conducted a survey among fintech market participants. As a result, companies had to face many key challenges during the first month of the war:

  • reduction of staff as they were needed for the Armed Forces;
  • the importance of maintaining a stable psychological state in the team;
  • inability to plan activities (the planning horizons have decreased to days, at best - weeks);
  • the need to relocate business to other, calmer regions; and
  • declining solvency of customers, which affects the company's activities.

In particular, one of the largest groups of companies in the Ukrainian e-commerce (EVO Group) announced the cessation of development of a number of its projects and the reduction of 40% of the team, almost 450 people. The company notes the gradual recovery of commerce in Ukraine, but the return to pre-war levels will not happen for a long time.

Despite the difficult times, 99% of fintech companies surveyed have a post-war recovery plan. Market participants also actively participate in volunteer programs to support the army and the population and, above all, support their own teams financially and psychologically. Thus, 77% of the surveyed companies continue to pay employees, and some have paid their salaries in advance.

Hard times have also prompted the state to pass laws on cloud technology and digital assets, that the industry has been waiting for  years. The Law of Ukraine “On Cloud Services” will significantly reduce corruption risks in the public IT sector; use IT budgets more efficiently and securely for infrastructure; introduce concepts such as technological and regulatory sandboxes for testing new products and services; and allow easier, safer and cheaper integration of fintech providers and banks’ products.

As for the Law of Ukraine “On Digital Assets”, it is the legalization of a huge segment of new business, which will not only start paying taxes but also attract investment in the state and create new jobs.

The simplification of access for Ukrainians to the services of such international companies as PayPal, Revolut, Klarna has become an important event in the market over the last month. Why is it important? This is another step towards full integration of Ukraine into the world fintech community.

We often say famously not without good. The war is a tragedy of the Ukrainian people. But we will not only survive, but also become stronger. After the end of the war, after the victory, Ukrainian fintech will become unbreakable. In fact, it is expected to integrate into Europe with the inflow of investment and increased profitability. Unfortunately, not everyone will be able to survive the war. But those startups that survive will be the most desirable targets for investment in Europe.

Therefore, Ukrainian fintech is all full steam ahead, and all the plans not implemented due to the war will be implemented. The Ukrainian fintech catalog will be presented to the European Commission and world fintech in early April (follow the announcements!), and awards for the best players will be held online in May and Digital Lending soon.  We will invite the best speakers to Kyiv after the Victory. Everything will be.



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Chris M Skinner

Chris Skinner is best known as an independent commentator on the financial markets through his blog,, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal's Financial News. To learn more click here...

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