Digitalization of the banking sector of Ukraine as a factor of financial stability enhancement

Abstract

The article reveals the role of digitalization of the banking sector of Ukraine as a factor in increasing financial stability. Purpose. The article explores the impact of digitalization on the financial stability of the Ukrainian banking sector during wartime and under economic uncertainty. It defines the essence of digital transformation in banking, highlights the main areas of technological innovation, and examines their influence on liquidity, operational costs, and customer trust. Particular attention is given to the development of online banking, mobile applications, and fintech services that ensure financial continuity and support the adaptation of the banking system to crisis conditions. Methods. The study applies a combination of theoretical analysis, comparative assessment of Ukrainian and European banking practices, and statistical generalization of data from the National Bank of Ukraine and international financial reports for 2022–2024. Systemic, comparative, and structural-analytical methods were used to identify correlations between the level of digitalization, bank liquidity, and customer confidence. The analysis focuses on leading Ukrainian banks - PrivatBank, Monobank, and Oschadbank - allowing for the identification of digital transformation models and assessment of their effectiveness. Results. The findings demonstrate that digitalization has become a catalyst for improving management efficiency and reducing operational risks in the banking system. The introduction of online payments, e-identification, and automated liquidity monitoring systems strengthens financial resilience and ensures stability in banking operations. However, the research also identifies challenges, including cybersecurity risks, technological dependency, and the need for greater digital literacy among customers. Conclusions. Digitalization serves as a strategic direction for strengthening the financial stability and security of Ukraine’s banking system. Effective digital transformation ensures sustainable cash flows, promotes financial inclusion, and builds a modern model of interaction between banks and clients. Future research should focus on developing an integrated framework for assessing the level of digitalization as a key indicator of financial stability. Keywords: digitalization, financial stability, online banking, fintech, banking sector, digital technologies.