How the banking system continues to function in times of war

Ukraine is currently going through a difficult period, but the banking system continues to function steadily despite a large-scale military invasion of the neighboring country. At first glance, this may seem like a phenomenon, because during constant shelling, missile fire, occupation of part of the territory, customers have the opportunity to get all the necessary banking services. Yet this is true and it has been influenced by the following factors:

Digitization and high-tech of Ukrainian banks.

During the pandemic, banks have significantly improved their internet banking systems. Due to these changes, customers have already become accustomed to most transactions without visiting bank branches (such as transfers, payments, account opening, ordering cards, currency conversion, l savings, loans, etc.).

The strong competition between banks in the market has pushed the constant development of technology, improvement of the interface and the introduction of new services. This was done to attract customers. Thus, today, mobile applications of Ukrainian banks are among the most advanced in Europe. In addition, for 2 years, banks have implemented telework for their employees. This gave the ability to support all necessary business processes after the war started, even without the ability to physically visit the office.

Policy of the National Bank of Ukraine.

In recent years, the regulator has made revolutionary changes to the regulations. These changes allowed banks to identify customers remotely, develop remote channels using bank ID system for authorization, extend electronic payment system rules to 23 hours per day and others. All of this has spurred banks to change their processes, to create new products for online interaction with customers. It was important to find conditions that allowed customers to use the bank’s services without problems or interruptions.

Successful collaborations

The presence of launched before joint projects between banks, financial companies, distribution chains which allows to withdraw money at the checkouts of stores, pharmacies, service stations, replenish accounts through self-service terminals. All these features help customers a lot in conditions where there is no access to branches or when they are forced to leave their homes due to hostilities.

Financial literacy of the population

Before the war, banks ran various CRM campaigns aimed at connecting customers to Internet banking. They offered them special rates if they agreed to make a transaction online instead of traditional checkouts, helping to understand the interface of the application, etc. This has led to the fact that most customers have mastered the technology in advance, and even a pensioner can pay for utilities remotely without any doubt that it is safe and credible.

With regard to banking trends during the war month tree, it is possible to highlight the following facts:

– Personal bank account balances during the war increased by almost 50 billion UAH. A possible explanation could be that it is the high level of public trust in banks, as well as the understanding that money or banknotes can be stolen during war, damaged by fire, etc.

– Non-cash payments remained at the same level as before the war. Yet the level of cost for entertainment, shopping or travel has dropped significantly. The main areas of expenditure are food, medicine, gasoline, etc.

– Demand for cash withdrawals from ATMs was only high during the first week after the start of the war (caused mainly by psychological factors) but quickly returned to normal levels

– The number of loan applications from individuals has decreased. Nevertheless, the demand from entrepreneurs and legal persons has increased due to the need for funds to recover the business

We hope that Ukraine will rebuild quickly after the war and that the banking system will become one of the examples of stable functioning in extraordinary circumstances in world history.

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