DEVELOPMENT OF FINANCIAL TECHNOLOGY IN THE BANKING SECTOR: THREATS AND PERSPECTIVES

Abstract

The article provides a comprehensive overview of the advancements and potential opportunities in financial technologies within the banking sector of Ukraine. It is emphasized that prior to the warfare, the domestic banking sector had already achieved a high level of digitization. After the beginning of military aggression, the main efforts of banks are focused on developing payment infrastructure, integrating artificial intelligence capabilities, leveraging cloud technologies, and ensuring the implementation of the concept of open banking. The study determines the main threats that pose risks to the development of financial technologies in the banking sector of Ukraine. The main of them are: physical infrastructure destruction; cybersecurity threats and information leaks; absence or insufficient regulation. The article proposes ways to counter threats and potential financial risks. According to the authors, mitigating the threat of physical infrastructure destruction, lack of electricity, and communication can be achieved due to the using of cloud technologies and the consolidation of banks with the POWER BANKING initiative. The increasing number of cyberattacks on banks and payment systems is part of hybrid warfare, highlighting the necessity for cybersecurity measures and the implementation of new methods of authentication, encryption, and monitoring to prevent cybercrime. Regulatory sandboxes create a favorable environment for innovation and further development of fintech services in the banking sector, thereby laying the foundation for postwar recovery in Ukraine. Therefore, the development of financial technologies in the banking sector is necessary and integral in the modern world, gaining even greater significance during times of armed conflict. These technologies can be both a threat and an opportunity for financial stability and the functioning of the banking system.