What’s happening with FinTech Ukraine?

Back in April, I shared a guest post by Rostyslav Dyuk, Chairman of the Board at the Ukrainian Association of FinTech and Innovation Companies (UAFIC), regarding the impact the conflict in Ukraine was having on the FinTech scene (followed a short time later by the view from Russia). Rostyslav kindly sent me an update to show what is happening today.

Four months of the war: what is going on with financial sector of Ukraine

The resistance to Russian aggression in Ukraine is now in its fifth month. The struggle continues, including the financial front. How does the financial sector look today?

1. The National Bank continues to implement measures aimed at supporting the financial system and liberalizing the currency market. At the end of spring the difference between the exchange rate of the cash market in Ukraine, and the official exchange rate of the national currency increased. This increased the negative effect on the economy. At the same time inflation accelerated, so the regulator made the right decision to return to an active interest policy. A significant increase in the discount rate will reduce the pressure on the foreign exchange market and help to keep citizens' savings secure.
2. Lending has resumed but, of course, not in the previous volumes. Banks are still lending to both consumers and businesses and, in addition, government programs are aimed at meeting credit needs.
3. At the end of spring Mastercard, Visa and Prostir payment systems reinstated the 0.3% interchange fee for goods and services for payment transactions. This is significantly lower than in the pre-war period. The restoration of the interchange commission will contribute to the growth of non-cash payments and increase revenues to the state budget as a result of the digitalization of payments.
4. Banks not only continue to operate sustainably but also test and implement new innovative solutions, such as a solution for accepting cashless payments by businesses using a smartphone (Raiffeisen Bank together with Visa). Banks are also moving to the "cloud", as the largest Ukrainian banks PrivatBank and Raiffeisen Bank did.
5. Work is underway to implement the principles of open banking, despite the war. For this, the leading associations of the financial sector continue to work together to implement open banking on a single platform that will unite all banks.

The fintech community also continues to work actively. Despite significant difficulties, everyone continues to do their job, realizing that this is an investment in the future of Ukraine.

Against the background of receiving the status of a candidate for EU membership, Ukraine joined the European Blockchain Partnership with observer status. The global goal of the project is to create a pan-European blockchain, and integrate the digital economic space of the EU and Ukraine. The next stage will be the expansion of the network of interstate blockchain partnerships in Ukraine with other countries.

In addition, the Ukrainian Association of Fintech and Innovation Companies (UAFIC) became an associate member of the European Digital Finance Association (EDFA). It is the first non-EU member state association to join EDFA. The cooperation in the direction of strengthening innovations in the financial sector by promoting technological development is ahead.

The holding of the Coding Challenge for a Ukraine hackathon by the UAFIC and EFA, with the support of the European Commission, was an important event. The goal of the initiative was to mobilize experts, programmers, and startups for the development of technological solutions that will help refugees, displaced persons and restore the economy of Ukraine. The winner of the hackathon was the AtomicLab team, which presented a solution for the restoration of cultural monuments of Ukraine that were destroyed during the war. The platform will bring together investors who can finance the reconstruction of a building or monument or cultural property, and performers who can fulfill restoration orders. The team received 10,000 euros from the partner of the hackathon LEO payment system.

The war continues and the struggle lasts. Everyone in their place contributes to the end of this crisis, which is getting closer every day thanks to our joint efforts.