In Ukraine, fintech only started to draw the attention of the financial sector players in 2017 after a series of related forums and events, but the industry is now beginning to take off with more than 60 companies at different stages of maturity, according to a 2018 report by UNIT.City, an innovation park in Ukraine.
Similar to the rest of the world, the emergence of the fintech in Ukraine started in part as a response to the banking crisis of 2008 – 2009, and more recently after the 2013 – 2014.
Most of the country’s fintech companies (58%) have been launched since 2015 and early fintech initiatives mainly focused on the areas of payments and money transfers.
Since then, fintech development has been actively supported by initiatives undertaken by its central bank, the National Bank of Ukraine (NBU), which approved the Comprehensive Program of the Ukrainian Financial Sector Development (Resolution No. 391 dated 18 June 2017).
The program includes initiatives such as the Cashless 2020 Strategy, transition to ISO 20022 standards, the introduction of electronic signatures, remote identification, support to improve financial literacy, and new rules to facilitate the licensing of payments services providers.
Besides governmental support, several factors including a rising Internet penetration rate, favorable regulations and easier access to capital and investment, have contributed to the development of fintech in the country.
In 2008, only 24% of the adult population had access to the Internet but this increased to 63% in 2017. Internet penetration and speed in Ukraine continue to grow steadily due in part to diminishing costs and the proliferation of smartphones.
Furthermore, the legal and regulatory environment to support fintech and other startups has significantly improved in the past years and is likely to continue to improve in the future, the report says, and initiatives such as acceleration programs and co-working spaces have helped fintech companies raise seed capital and grow.
Ukraine’s fintech players
Ukraine’s fintech industry is largely dominated by payments services providers and money transfers operators, which represent 31.6% of the fintech industry, the research found.
It is followed by infrastructure and enabling technologies at 19.3% and lending at 14%.
Though present in much smaller proportions, Ukraine is also home to fintech companies operating in the areas of insurtech, regtech, personal finance, marketplaces, digital and neo banks, mobile wallets, blockchain and cryptocurrency.
More than 60% of the country’s fintech startups were founded within the last four years, and about 84% of fintech companies have already launched services and products, while 16% are still in the startup phase.
In the blockchain and cryptocurrency segment, Attic Lab is a software development company focused on creating products that improve financial and accounting services. Kuna is a cryptocurrency exchange that position itself as the easiest way to buy and sell cryptocurrencies in Eastern Europe. Coinypay has developed a chatbot utilizing artificial intelligence (AI) and cryptocurrencies to enable one-click payments. The company also develops custom chatbots for websites and Facebook pages.
In payments, Easypay offers a multilateral platform that provides a comprehensive payment tool supported by offline (EasyPay-branded payment terminals) and online (easypay.ua, e-commerce tools, and mobile applications) infrastructure. Meanwhile, Electrum enables clients to quickly open an anonymous e-wallet to pay for goods and service sin real-time, while providing them with loyalty and counterfeit protection services.
In infrastructure and Saas, UnityBars focuses on the development and implementation of financial and banking software for corporate, small and medium-sized enterprises (SMEs) and individual clients. The company offers a full cycle of development and support for its IT products. YouControl is a company that provides an online service to check counterparties.
Other noteworthy fintech companies in Ukraine include Treeum, the operator of several platforms and services including Finance.ua, a tool for selecting and comparing financial products, and Bank Online, a communication platform for financial experts, EWA, a Saas insurance platform that connects insurers with intermediaries such as banks, agents, brokers and aggregator websites, MTAX Ukraine, which provides accounting services to SMEs through a mobile app and website, and Startup.Network, an investment platform for venture market participants.