Recent weeks, marked by a spread of the coronavirus infection and quarantine announced across the world and in Ukraine, clearly demonstrate the relevance and need for sustainable development of domestic FinTech market. Therefore, the NBU together with market participants will focus its efforts on the development of FinTech Development Strategy 2025.
“FinTech solutions can maximize the quality of distance financial services and minimize the involvement of human resources (and physical contacts) in order to provide the services, which is relevant in modern circumstances,” stressed Mykhailo Vidiakin, Deputy Director of NBU Strategy and Reforming Department.
The work on the FinTech Development Strategy 2025 started on 3 March 2020* at a strategic session with financial sector representatives. In a brainstorm format, representatives of banks and other financial institutions, professional associations, public organizations, BigTech companies, and technology providers analyzed the current state and tried to project prospects for the industry. This helped the NBU to develop the vision and goals of the Strategy.
According to Kate Shcheglova, the senior project manager on Fintech Development Strategy 2025 at NBU, the strategy project is based on a comprehensive study of over 30 leading and most advanced global Fintech ecosystems and modern approaches to financial innovations regulation by global regulators.
“The NBU’s strategy envisages harmonization of all projects and initiatives, the implementation of which will determine a dynamic development of Fintech industry over the next five years. Furthermore, the regulator acknowledges the importance of accelerating this process, as Fintech provides the infrastructure needed when traditional finance goes online," noted Ms Shcheglova.
The document envisages four basic components to develop the modern Fintech ecosystem: regulation and policies, capital, demand, and talents.
Based on this, the key effective elements of the strategy are as follows:
- development and implementation of a full-fledged regulatory "sandbox” concept for a quick testing of innovative projects
- launch of an academic base focused on open banking
- integration of related digital projects into the general roadmap to develop a sustainable Fintech ecosystem, including the introduction of remote identification and verification, implementation of PSD2 Directive (EU), improvement of financial monitoring and KYC regulations, and 24/7 availability of instant payments from account to account in SEP
- creating conditions to improve the investment climate and develop small and medium-sized businesses
- raising the level of financial awareness and involvement (inclusion) among households and businesses.
The NBU is currently summarizing the results of the strategic session. The revised version of the strategy, taking into account all proposals delivered by financial community, will be published on the official website of the regulator for public discussion.
It is worth noting that the development of an effective Fintech ecosystem is impossible without a coordinated cooperation of all interested government institutions. “The development of Fintech industry is one of the core elements of the Strategy of Ukrainian Financial Sector Development until 2025. The NBU is working on a cross-sectoral map of changes to all regulations that will impact the successful development of modern innovative solutions in Ukraine. We are moving forward in the development of the financial sector, and it is great that we can do it even remotely, together with all the sector participants,” said Mykhailo Vidiakin.
*Several weeks before the quarantine was announced in Ukraine