- The war in Ukraine has not shut down the local banking sector.
- Adaption to more digital strategies, which was happening already, has accelerated since the conflict began.
- This article is a part of a series covering highlights from Money20/20 Europe.
Since Russia invaded Ukraine in late February, thousands of Ukrainian civilians have been killed or injured, even more have been pushed into poverty, and people have been left without jobs and homes.
The banking sector there, though, has carried on. "All banking services work like before the war," Nataliia Slieptsova, CMO of Sportbank, said.
"We never stopped," Anna Tigipko, founder and CEO of Izibank, added. "The financial sector, neobanks especially, continue operating, no problem whatsoever. And I think we did remarkably well considering the circumstances."
Part of the reason why Ukraine's financial sector could adapt so quickly was because the pandemic had helped accelerate digitalization, getting people more used to online banking.
"Thanks to COVID, it was really good training for the whole financial market," Maria Kolganova, executive director of the Independent Association of the Banks of Ukraine, added. "We have really good regulation in the financial sector, which helps us also not to stop."
The banks had to dramatically pivot their operations, though.
Alyona Shevtsova, the owner of IBOX Bank, said that it had temporarily relocated its head office to Warsaw, Poland, and had moved mainly female staff there. Ukraine men aged between 18 and 60 aren't allowed to leave the country, apart from in certain circumstances.
"We had no other option" but to relocate the bank, Shevtsova said, adding that it was "extremely risky" to stay in Ukraine.
Millions of Ukrainians have relocated across Europe during the invasion, with many seeking refuge in Poland, Hungary, Germany, and Romania.
Some are opening new bank accounts overseas, while others continue to use exist Ukraine-based ones. Some have opened new accounts using Diia, the app created by Ukraine's government to hold documents such as coronavirus vaccine certificates, driving licenses, and insurance documents.
Slieptsova said that "a lot" of Sportbank's more than 400,000 clients are now abroad. The challenge is now for banks to ensure customers get the same quality of service regardless of where they're located, Tigipko said.
And in addition, Ukraine's central bank more than doubled its interest rate in June from 10% to 25%. "We're in a bit of a pickle now," Tigipko said, adding that izibank was trying to reevaluate its product mix.
But the speakers at Money20/20 remained optimistic about the future of Ukraine's banking sector.
"The Ukrainian financial market was pretty developed before the war," with neobanks, payments services, and instant cash-in, cash-out services," Tigipko said. "The war proved that we are quite sustainable, we can resist the challenge."
"We'll continue developing and growing and getting new customers," she continued. "And I think we are completely capable of continuing to running this operation for a long time."
