The banking sector of Ukraine in the space of influence of the VUCA environment on financial stability

Abstract

Ukraine has been operating in a VUCA environment for quite a long period of time, which was significantly aggravated under the influence of the Covid-19 pandemic and the beginning of full-scale military operations on the territory of the country. A VUCA environment, as the antipode of stability, is characterized by chaos and unpredictability. In this article, financial stability of the banking sector is considered as its ability to effectively perform its functions and resist the effects of destructive factors of a VUCA environment. The essence and features of a VUCA environment manifestation have been examined in the article. The main challenges of the VUCA environment, which caused destructive changes in macroeconomic indicators and the main indicators of the functioning of the banking sector, have been identified, namely: the impact of the global financial crisis of 2008-2009; destabilization of the political situation, the conduct of the anti-terrorist operation in the east of Ukraine, the annexation of Crimea (since 2014); the impact of the Covid-19 pandemic (since 2020); a full-scale military invasion of Russia into the territory of Ukraine (since February 24, 2022). The country’s economy as a whole and the banking sector in particular have suffered the greatest losses during the studied period precisely as a result of the full-scale military invasion. In response to the challenges of the VUCA environment, it became necessary to develop concepts for countering destructive influences. The strategy of behavior in the VUCA environment is aimed at adaptive behavior, meaningful risk, and active implementation of innovations in the business model. Among the technologies that change business models of banks, acting as tools of digital transformation, providing new approaches to customer service and organization of internal business processes in banks, there are: artificial intelligence, big data, blockchain, biometrics, application programming interfaces, etc.