Diagnostics of the Digitalization of Ukraine’s Banking System

Abstract

The article presents a comparative analysis of the digitalization and digital adaptation of the banking system of Ukraine under the conditions of full-scale armed aggression along three interrelated lines: the development of payment infrastructure and cashless settlements; the operational efficiency of banks under the investment of funds in the acquisition, upgrading and creation of long-term technological assets; and the interaction of banks, the State and technology companies in the creation of joint digital solutions. The study addresses the gap associated with the absence of a coherent explanation of what enabled the national payment system to remain operational amid the physical destruction of equipment and prolonged power outages. The methodological framework comprises statistical and structural-dynamic analysis of the official data of the National Bank of Ukraine for 2019–2026, comparative analysis of the financial statements of incumbent and digital banks, assessment of the impact of technology expenditure on profitability, and economic-mathematical modeling of the velocity of cashless money circulation and of an indicator of the availability of financial services. It has been determined that the share of cashless transactions by number stabilized at the level of 95% owing to the spread of software payment terminals and contactless payments. An unevenness of the payment space has been revealed. Payment activity is concentrated in the central macro-region, whereas in the frontline regions, despite their minor share of the total turnover, the highest level of use of software terminals by small business entities has been recorded. A non-linear relationship between the volume of capital expenditure on information technology and the return on banks’ assets has been proved. At the initial stage of upgrading, the indicator declines and grows only after the replacement of the core accounting system. A positive effect on the interest margin has also been identified for solutions that provide banking infrastructure and interaction software to third-party companies. It has been substantiated that State targeted payment programs act as an external factor in expanding the population’s access to financial services. The scientific novelty consists in substantiating the transition from a hardware-based to a software-based model of payment infrastructure and in the formalization of an indicator of the availability of financial services.