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Strategy of Ukrainian Financial Sector Development until 2025

The National Bank of Ukraine (NBU), the National Securities and Stock Market Commission (NSSMC), the National Commission for Regulation of Financial Services Markets (NCFS), the Deposit Guarantee Fund (DGF), and the Ministry of Finance of Ukraine have signed and began to implement the Strategy of Ukrainian Financial Sector Development until 2025.

The goal of the Strategy is to ensure that the reform and development of Ukraine’s financial sector moves forward in line with international best practices and that the actions envisaged by the EU-Ukraine Association Agreement and Ukraine’s other international commitments are implemented.

On 28 May 2019, the NBU, NSSMC, NCFS, DGF and MoF signed the Memorandum of Understanding and Cooperation on the Preparation and Implementation of the Strategy. The work to create the Strategy was done in March–December 2019. The interagency working group tasked with drawing up the Strategy included more than 200 people. The working group held two rounds of public discussions with representatives of the financial market, professional associations, NGOs, international organizations, and experts.

The heads of the entities that drafted the Strategy signed it on 16 January 2020 and approved it with their resolutions under established procedures. The NBU Board approved the Strategy on 26 December 2019 with Decision No. 1010.

Strategic directions of development

The Strategy of Ukrainian Financial Sector Development covers five strategic directions of development: financial stability, macroeconomic development, financial inclusion, development of financial markets and innovation development. Each direction has its own strategic goals and performance indicators.


Strategic direction 1. Financial Stability
  • Effective Regulation and Supervision
    • Improving the model of the financial sector regulation and enhancing institutional capacity of regulators
    • Harmonizing regulatory requirements with the EU laws and advancing internal cooperation in banking supervision
    • Improving regulation and supervision based on proportional risk-based approach
    • Creating the deposit guarantee system of members of credit unions and guaranteed payouts under life insurance agreements, improving operation of the deposit guarantee system and the compulsory civil liability insurance.
    • Improving the deposit guarantee system and forecasting potential risks of insolvent banks
    • Advancing regulation and supervision of financial institutions’ transactions with related parties
    • Creating effective mechanisms for resolving insolvent or fictitious banks and strengthening the mechanism of resolving potential insolvent banks
    • Introducing international principles of state regulation and supervision of nonbank financial service market in line with IAIS, IOPS, and the EU directives, including Solvency II
    • Introducing the European regulations on capital market abuse, including MAR and MAD requirements
    • Introducing supervision fees


  • Financial sector transparency
    • Promoting transparency of financial sector customers
    • Improving quality standards of services and transparency of information of financial service providers
    • Advancing information sharing between the financial sector regulators, the DGF, the state agencies and participants of financial services markets
    • Implementing international financial reporting standards for supervision of the financial sector (FINREP/COREP)
    • Ensuring transparency of main performance indicators of nonbank financial institutions presented in electronic format, introducing information disclosure according to Solvency II reporting standards
    • Implementing the BEPS Action Plan Implementation in Ukraine
    • Accessing the international information exchange


  • Financial sector’s resilience to challenges
    • Reducing the level of non-performing exposures in banks and nonbank financial institutions
    • Decreasing dollarization
    • Preventing risk concentration by financial market participants
    • Ensuring adequate liquidity in the financial system
    • Creating competitive conditions on the financial market
    • Regulating the DGF debt


  • Adequate corporate governance and risk management in the financial sector
    • Brining corporate governance of financial sector participants in line with international standards
    • Strengthening risk management of financial market participants
    • Improving efficiency in managing fiscal risks
    • Developing socially and economically oriented financial market participants
    • Advancing efficiency of management and sale of non-performing exposures (NPE)
Strategic direction 2. Macroeconomic development
  • Ensuring macroeconomic stability
    • Implementing responsible monetary and fiscal policies and enhancing their coordination
    • Ensuring effective allocation of the GDP through the budgeting system
    • Implementing mid-term management of the government debt for 2019–2022, including decreasing the share of the government debt in the GDP
    • Improving quality and competitiveness of human capital and change of the labor migration trend
    • Increasing investments in infrastructure


  • Fostering bank lending to the economy
    • Developing lending to small and medium businesses (credit guarantees, all-in-one products, improved reporting, analytical support)
    • Developing syndicated lending
    • Resuming mortgage lending


  • Development of nonbank funding
    • Development of nonbank lending
    • Expanding possibilities for economic entities in financial leasing for replacing fixed assets


  • Protection of creditors’ and investors’ rights
    • Improving the legal framework and legal protection of creditors’ and investors’ rights
    • Establishing alternative dispute settlement procedures  
    • Supporting legal proceeding and enforcement of court decisions
    • Implementation of international standards and mechanisms of using financial collateral
    • Introducing compensation schemes to protect investors on the stock market


  • Creating conditions for long-term funding in the economy
    • Promoting contribution pension provisioning
    • Developing the universal life insurance market
    • Introducing conventional investment funds
Strategic direction 3. Financial inclusion
  • Improving accessibility and use of financial services
    • Drafting and implementing the Financial Inclusion Strategy
    • Creating conditions for development of remote distribution channels of financial services
    • Creating the infrastructure to provide financial services in remote territories
    • Conversing payments to the state to electronic channels
    • Improving a regulatory framework to enhance effectiveness, competition and security of electronic payments in the financial system
    • Accessibility of financial services for people with special needs


  • Protection of consumer rights in financial services
    • Developing and introducing a regulatory framework for supervising the financial sector participants
    • Ensuring transparency of information on commission and payments charged on services of banks and nonbank financial institutions, as well as payments guaranteed to the bank depositors and respective maturities
    • Expanding the DGF participants and guaranteed deposits, gradual increase in the deposit guarantee amount in banks
    • Improving means for disclosing information by financial institutions to customers, including prior to entering into agreements
    • Enhanced control of advertising on the financial services markets 
    • Establishing an independent mechanism for revolving disputes


  • Improving financial literacy of the general public
    • Holding awareness raising campaigns for different demographic groups and representatives of small and medium businesses in the remote regions
    • Opening the Information and Communications Center (NBU Money Museum)
    • Creating a single communication platform (web-site) with useful insight on types and use of financial services
    •  Implementing special programs for training expertise and skills in fintech for different groups of the general public
Strategic direction 4. Financial market development
  • Development of the nonbanking financial services market
    • Stimulating development of the insurance service market, including, compulsory civil liability insurance, agricultural insurance with the support of the state, distribution of insurance services
    • Promoting development of credit unions, private pension funds, and financial leasing
    • Advancing security of trustors of construction investment funds
    • Lowering insolvency risks of borrowers
    • Creating tax incentives for development of nonbanking financial services market
    • Deregulating markets of financial services with low risk or inconsistent with the EU practices


  • Effective capital market infrastructure
    • Providing clearing infrastructure for variation margin trading
    • Introducing international standards for the capital market infrastructure, including CSDR, EMIR, MIFID ІІ, MIFIR, PFMI transposed for the Ukrainian market.
    • Approval of the national general agreements in line with GMRA & ISDA


  • Establishing liquid markets of financial instruments and mechanism/instruments for mitigating risks of financial transactions
    • Promoting a liquid market of government bonds
    • Improving regulation and development of derivative markets
    • Commencing issue of documents of title
    • Establishing an asset securitization institution


  • Integration hryvnia financial instrument in the global financial markets
    • Fostering trading hryvnia financial instrument on the international markets
    • Including Ukrainian securities to the internal indices
Strategic direction 5. Innovation development
  • Development of transparent architecture of the financial market and regulators’ platform
    • Transposing PSD2 requirements into national law
    • Introducing new payment standards and formats (ISO 20022)
    • Introducing a national system of instant payments in Ukraine


  • Development of the FinTech and digital market
    • Devising and implementing the FinTech development strategy in Ukraine
    • Establishing regulatory sandboxes
    • Developing and regulating crowd funding platforms, P2P
    • Working on issue of the central bank digital currency (e-hryvnia), as well as deciding on the best business model of the e-hryvnia issue and circulation
    • Introducing means for applying artificial intelligence and machine learning in finances (KYC, AML, combating fraud, personalized financial products, forecasting risks based on analysis of bank transactions, etc.)
    • Developing the framework for identifying customers using biometric data
    • Introducing regulation for circulation and use of digital assets in Ukraine
    • Introducing the framework set out in EU GDPR (General Data Protection Regulation) for finance


  • Development of SupTech & RegTech
    • Automation of supervisory processes of regulators and business process of the DGF
    • Creating a single electronic account for bank customers (e-KYC)
    • Creating an electronic personal account for cooperating with financial institutions
    • Digitalization of registers, including insurance agent register
    • Development R&D in the NBU


  • Development of the digital economy
    • Expanding the list of administrative remote services
    • Conversing to digital fiscal regime (cloud cash desks)
    • Creating a central on-line database of insurance agreements mandatory by law
    • Fostering development of online financial services, including electronic remote verification and identification of customers by nonbank financial institutions
    • Developing NBU BankID


The Strategy is being implemented by performing individual events (projects) set out in the Strategy Roadmap in line with the project management principles. A Financial Development Committee

was appointed for coordination and monitoring of actions by involving top-managers of regulators, the Ministry of Finance, the DGF, the professional associations of market participants. The Strategy will be updated when the Financial Development Committee so decides.