How banking system keeps operating amid war

Ukraine is facing now a difficult time, but the banking system continues to work steadily despite a full-scale military invasion of the neighboring country. At first glance, this may seem like a phenomenon, as during constant shelling, missile strikes, occupation of a part of the territory, clients have a possibility to obtain all necessary banking services. Still, this is true and it was influenced by the following factors:

Digitalization and high-tech of Ukrainian banks.

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

High competition among banks in the market has pushed for the constant development of technology, improving interface and introduction of new services. It was done in order to attract customers. So, today the mobile applications of Ukrainian banks are among the most advanced in Europe. In addition, over the past 2 years, banks have established remote work of their employees. This gave a possibility to support all the necessary operational processes after the war begun, even without the opportunity to visit the office physically.

Policy of the National Bank of Ukraine. 

In recent years, the regulator has made some revolutionary changes in regulations. These changes have enabled banks to identify customers remotedly, develop remote channels using the Bank ID system for authorization, expanded the rules of the electronic payment system to 23 hours per day and other. All this stimulated banks to change their processes, create new products which were aimed at online interaction with customers. It was important to find the conditions for clients to use the bank's services without any problems or interruptions.

Successful collaborations

The presence of  launched before joint projects between banks, financial companies, retail chains which allows to withdraw cash at the cash desks of stores, pharmacy, gas stations, replenish accounts through self-service terminals. All this features helps clients a lot in conditions when there is no access to branches or they are forced to leave their homes due to hostilities.

 Financial literacy of population

Before the war, banks conducted various CRM campaigns aimed at connecting customers to Internet banking. They offered them special rates if they were agree to make an online transaction instead of the classic cash boxes, 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 retiree can pay for utilities remotely without a doubt that it is safe and credibly.

As for the banking trends during the tree month of war, its possible to highlight the following facts:

 - The balances on the bank accounts of individuals during the war have increased by almost UAH 50 billion. One possible explanation for it could be the fact that it is the high level of public confidence in banks, as well as the understanding that cash or banknotes can be stolen during the war, damaged by fire, etc

- Non-cash payments remained at the same level as before the war. Still, the level cost of entertainment, shopping or traveling has significantly decreased. The top areas of spending are food, medicine, gasoline etc

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

- Number of loans requsts  from individuals has decreased. Nevertheless, demand from entrepreneurs and legal entities has increased due to the necessity for funds to recover the business

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