August 25, 2021

Open Banking in the Ukrainian market: An Opportunity for banks

The banking environment has changed rapidly in the past 10 years, one of the main drivers being the Open Banking movement. And one of the latest countries joining the Open Banking race is Ukraine.

The East European country will implement the Payments Services Law, adopting PSD2 directives, and moving the Ukrainian payments infrastructure towards international ISO 20022 standards by the end of 2021.

By choosing an Open Banking approach, Ukraine will be taking the next big step in the development of the Ukrainian financial services sector, but also will need to deal with various threats along the way. The main goal of the new law is to move Ukraine towards a more transparent and innovative financial infrastructure, but the Ukrainian FinTech scene has already been active for some time.

FinTech Development in Ukraine

The National Bank of Ukraine has already approved the Strategy for the Development of FinTech in Ukraine by 2025, a step-by-step plan to create a full-fledged fintech ecosystem in Ukraine with innovative financial services and affordable digital services. Last year, the country adopted the IBAN standard to ensure fast and efficient payments, taking a small first step towards modernisation of the banking sector.

In 2014, total investment activity in fintech in Ukraine, (VC, PE, M&A) was around 45,6 million USD. However, in the first half of 2019 alone, investors poured 37,8 million USD into Ukraine’s fintech activity. This shows that investors are increasingly responding to these new market players and intend to nurture the Ukrainian fintech landscape.

But the market recognises that investment is not the only aspect required to foster innovation in the financial services sector. When asked to name the most important legislative changes necessary for the development of the sector, more than half of Ukrainian banks and fintech companies responded it would be PSD2-related regulation. Financial institutions need regulation to ensure a safe and productive environment to grow and prosper, and that is exactly what the Ukrainian regulator is ensuring.

Open Banking APIs already in the market

Although the Payments Law is recent, certain banks in Ukraine have already been exposing APIs.

The National Bank of Ukraine has started to use APIs to publish their data and give access to the public. As of August 13th 2021, the central bank has 23 published APIs and 6 APIs in their pilot phases.

Monobank has already developed an API dashboard with 15 APIs for developers that allows them to access and use bank data.

In September 2009, PrivatBank became the first bank in the world to open a public API, which already boasts 4,900 users. PrivatBank introduced its public API to Ukraine in 2014, and there are more than 100 APIs in their catalogue right now.

Regulation can help the market adopt the right approaches but even without regulation, banks understand that Open APIs bring opportunities for growth and innovation.

Benefits of Open Banking in Ukraine

From customers to financial institutions, Open Banking creates opportunities for all members of the banking ecosystem, as new data-sharing paradigms ensure a more customer-centric approach to finance and foster transparency in the sector. But how will Open Banking benefit banks in Ukraine?


  • Market reach

In 2019, 37% of Ukraine’s population did not have bank accounts. This is a high level of financial exclusion compared to other countries in Europe. These potential customers  often lack trust in traditional financial services or cannot access such services due to distance or lack of awareness. These same customers will soon be targeted with innovative applications by new fintech companies, but banking institutions can play the same game. By accelerating development of fintech applications, traditional financial institutions will also be able to reach new segments that were previously unreachable.


  • Increased competitiveness

The entrance of new market players will raise customer expectations and will inevitably create a highly competitive landscape. With the right resources, banks can turn the tide in their favour by expanding their own offerings and addressing needs in new and innovative ways.


  • New revenue streams

Open Banking paves the way for new partnership and business models to create new revenue streams for existing financial institutions. If banks learn to treat APIs as products, they will see a return on their Open Banking investment.


By introducing the world-wide Open Banking experience to Ukraine, the country will move closer to Europe and other regions with more advanced financial infrastructure. Ukrainian customers will be pleased to experience benefits delivered by the new fintech movement, and Ukrainian banks will be able to harness APIs to drive growth, innovation, and revenue.

Despite its attendant advantages, transforming the financial ecosystem is not a simple feat. Banks in Ukraine will have to look to their European cousins to understand the effects of such regulation and to determine the best course of action. There’s no one-size-fits-all solution, but banks will find that learning from the European experience might accelerate their digital transformation journey and help them proceed with less uncertainty.