For the second time since the onset of russia's full-scale invasion of Ukraine, the National Bank of Ukraine has updated its institutional Strategy, which is focused on resisting russian aggression and on the country’s recovery. In particular, in response to the new environment, the regulator has updated and supplemented the list of priority measures of the NBU Strategy.
The update of the NBU Strategy will help improve the efficiency of the NBU’s operations in a rapidly changing external environment, and strengthen its readiness for new challenges and various scenarios.
“We live in an environment of unpredictable external circumstances, and our task is to reduce the zone of uncertainty during strategic planning. The updated NBU Strategy fulfills this task. We are planning for a zone of certainty and, as far as possible, clarifying our priorities in response to new challenges,” said NBU Governor Andriy Pyshnyy. ”Our key commitment remains to fulfill the mandate under any circumstances. At the same time, we will expand the tools and ways to achieve it, apply our experience in areas that were previously not typical for a central bank, increase the scope of work related to financial inclusion, and plan new tasks to continue internal transformation and enhance the team’s effectiveness, in particular through corporate culture.”
At the end of 2024, the NBU team held a strategic session to review and clarify current trends, threats, and opportunities for the financial sector and the NBU, verify and expand the current roadmap of the NBU Strategy across all strategic goals, and update the indicators for achieving them. As a result of the update, 11 new indicators were added to the NBU Strategy and 6 existing ones were clarified. The roadmap in the updated document was supplemented by 17 new measures, and another 45 measures were clarified or transformed in line with the current challenges.
The NBU's priorities in terms of strategic goals have been updated
The list of the regulator's priorities has been supplemented by a number of relevant measures and revised indicators, in particular:
- Under Goal 1 Sustainable Hryvnia, the NBU plans to achieve more ambitious objectives in terms of price stability, inflation expectations, and exchange rate sustainability.
- Under Goal 2 Financial Stability, new measures have been added in order to:
- enhance business continuity of financial sector participants
- improve requirements for organization of the risk management system in banks
- identify and respond to ties with the aggressor state in the ownership structures of financial market participants
- create registers of drops and miscoding, and ensuring counteraction to existing and new drop schemes
- ensure resilience of the financial sector’s critical infrastructure.
- The name of Goal 3 has been updated to reflect the deepening of European integration – Financial System Operates for the Country’s Recovery and Is Integrating into the EU – and the list of initiatives to attain this goal has been revised. Thus, the NBU’s efforts will additionally focus on:
- integration in the EU financial services market
- development and implementation of the financial sector ESG Policy
- compliance with the requirements for the corporate governance system of financial market participants (on a continuous basis and taking into account the risk-based approach)
- promotion of financial inclusion, including taking into account the needs of war veterans in Ukraine
- initiatives to develop lending and financial literacy of households and entrepreneurs, in particular, taking into account new interagency strategies (the Lending Development Strategy and the National Strategy for Financial Literacy Development until 2030).
Additional indicators for the implementation of the tasks under this goal are the opening of negotiations on Ukraine’s accession to the EU under negotiation clusters that include chapters of which the NBU is in charge or in which it is involved, and the NBU’s Comprehensive Plan for European Integration, which was updated in line with the course of the negotiation process.
- Under Goal 4 Modern Financial Services, the NBU plans to:
- strengthen control over cyber resilience, information security, and digital operational resilience, in particular, taking into account the EU legislation on digital operational resilience of the financial sector (DORA)
- expand the perimeter of activity to implement regulation and supervision of virtual assets
- specify measures to develop cash circulation in accordance with the approved model of the organization of cash circulation in Ukraine and the NBU’s infrastructure.
Additional indicators for achieving this goal are the introduction of regulation for the use of cloud computing technology and the provision of cloud services, as well as the impossibility of using software solutions from suppliers associated with the aggressor country.
- Under Goal 5 Effective Central Bank, the list of priority measures aimed at ensuring the continuity of the NBU’s performance of its functions under any conditions has been significantly expanded. In particular, these include:
- developing security systems and organizing performance of the NBU’s tasks as a critical infrastructure operator
- building and developing the NBU State Sectoral Archive
- developing and phased implementation of the NBU’s ESG Policy
- streamlining the process of change management at the central bank
- developing the regulator’s innovation potential (in particular, the development of the NBU’s Digital Transformation Strategy) and researching on artificial intelligence and its implementation in the central bank’s processes
- clarifying measures aimed at developing human capital, in particular, with regard to the development of corporate culture and the reintegration and adaptation of war veterans at the NBU.
As a reminder, in May 2023, the NBU unveiled its own Strategy called Financial Fortress focused on resisting russian aggression and on the country’s recovery. This is a flexible document that is periodically updated to account for changeable and unpredictable external circumstances. The Strategy was first updated a year ago, in January 2024.