Fintech as a fence for the shock and fuel for the recovery? Lessons from the war

Project Details


We want to investigate the mechanisms from which financial technologies (Fintech) facilitate Ukraine's economic development and welfare when taking the period of Russia's invasion as the observing window.

The war witnessed a collapse of the whole system for specific regions of Ukraine, including the financial system. This external shock for local citizens may lingeringly affect their adoption or preference for financial services. Therefore, using fintech may provide a lens for nurturing economic recovery after social trauma, while timely and proper policy implementation is essential to promote development.

We will first discuss the extent to which the citizens from the war-affected regions could continue to use financial services in the form of fintech or traditional banking and the obstacles they had in using these services. Second, by comparing them with the citizens from non-affected (or directly affected) regions, we would try to argue the mechanisms that explain the performance of the Ukrainian economy under the prism of a stable or turbulent economic environment as well as increasing geopolitical uncertainty arising from the ongoing war. This method is similar to the well-known approach of “Difference in Differences (DiD)”. Consequently, we would provide policy implications based on the fieldwork research, which would be collaborated with partners from Odessa University.

It is important to mention, that financial market in Europe is a place where people are used to work with fintech. People are passive participants in this market (buyers and sellers of FT technology and services). There isn’t such practice in Ukraine because there is no such market and (there is only a segment of the corporate sector - commodity markets), there are no individuals in the role of buyers.

Ukraine face a task of a qualitative leap through an innovative breakthrough through the creation of a digital space that has been created and provides 3 basic parameters: 1) a digital identity confirmation; 2) the ability to perform actions protected by a digital signature; 3) a guaranteed and state-provided information security system. To ensure the growth of public interest in fintech, it is necessary to conduct training and education from an early age, including information about possible risks. This is a task for the post-war period. It is also important to develop the financial literacy course. The state should create a space for the development of financial markets and the formation of competent interest and motivation among the general population (financial inclusion).
Effective start/end date29/03/2329/03/23