Home Resilience EU backs ‘Fintech Challenge for Ukraine’ hackathon

EU backs ‘Fintech Challenge for Ukraine’ hackathon

Ukraine's resilience: the hackathon aims to encourage fintech solutions that can help | Credit: wal_172619; Pixabay

A European Union (EU)-supported hackathon to develop technological solutions that will ‘enable access to and provision of everyday services to Ukrainians and help the country’s recovery’ has kicked off.

The ‘Fintech Challenge for Ukraine’ is inviting the private-sector and individuals from any location worldwide to create solutions that will: ‘provide timely multi-sectoral assistance to refugees, displaced and non-displaced persons’; ‘enable companies [with] the provision of everyday services’; and ‘help in the recovery of a resilient and modern country’.

A hackathon is an event during which participants, typically coders and developers, design and present innovative solutions to a particular challenge. They have become increasingly popular ways for public authorities worldwide to engage with embryonic fintech solutions.

This hackathon – which launches just over 11 weeks since Russia’s large-scale military invasion of its southern neighbour – asks participants to focus on challenges including financial and payment services, insurance, DeFi (decentralised finance) and web3; ‘social resilience and the fight against disinformation’; and cybersecurity.

Workshops to generate and refine ideas will be held from 8-10 June, with members of Ukraine’s public administration due to be involved. The hackathon ‘proper’ will take place from 17-26 June. A concluding hybrid event will be held in Brussels at the end of June, with the best idea winning EUR 10,000 (about £8,500).

The European Digital Finance Association and the Ukrainian Association of Fintech and Innovation Companies are organising the challenge, with the European Commission’s Directorate-General for Financial Stability, Financial Services and Capital Markets Union (DG Fisma) providing finance.

Ukraine banking system’s resilience

The EU’s financial services commissioner Mairead McGuinness gave the opening remarks at an online event to kick off the hackathon on 16 May.

Setting the context of the high-level actions the 27-member bloc has taken since Russia’s invasion such as sanctions, as well as the provision of military and humanitarian support to Ukraine, McGuinness described the hackathon as a “smaller and less immediately obvious” way that the EU could help.

“The fintech revolution has demonstrated that there are so many creative minds seeking technological solutions to all sorts of problems in the world, and that’s true too in Ukraine,” McGuinness said.

Ukraine’s minister of social policy Maryna Lazebna and National Bank of Ukraine (NBU) deputy governor Oleksii Shaban also spoke at the event.

Lazebna said that Ukraine’s progress at digitising welfare payments prior to Russia’s invasion had stood the country in good stead given the challenge of distributing payments by non-digital means. She also highlighted how digital money transfers had enabled people worldwide to send money to Ukrainians.

Shaban, meanwhile, highlighted the resilience of Ukraine’s banking system. “This may sound like a miracle, but the Ukrainian banking system is operating in a ‘business-as-usual’ mode,” he said. “About 78 per cent of bank branches are open today. The NBU and banks are doing all they can to save clients’ deposits, make uninterrupted payments and support the economy. The digital banking infrastructure continues to work smoothly.”

Like Lazebna, Shaban described how pre-war digital developments had helped: for example, moves to enable remote ID.

The launch event – overseen by DG Fisma’s digital finance unit head Jan Ceyssens – also saw contributions from European Parliament (EP) vice-president Eva Kaili (who is also chair of the EP’s Science and Technology Options Assessment body); Ukrainian Association of FinTech and Innovation Companies’ chairman of the board Rostyslav Dyuk; and the European Digital Finance Association’s president Maria Staszkiewicz.

Commission launches open finance consultation

Separately, the European Commission has opened consultations on the ‘open finance framework and data sharing in the financial sector’, as well as on the application and impact of the EU’s revised Payment Services Directive (PSD2). Both consultations are highly relevant to those developing fintech products and services.

Open finance refers to third-party service providers’ access to customer data held by financial sector intermediaries and other data holders for the purposes of providing a wide range of financial and information services. Subject to an impact assessment, the Commission announced a new open finance framework on 25 November last year in a communication on Capital Markets Union.

The open finance framework consultation, which closes on 5 July, comprises 88 questions and is split into a public consultation (aimed at respondents with ‘little knowledge about the payment industry and relevant laws’) and targeted consultation (aimed at those with professional knowledge and/or working experience in payments).

Reacting to the consultation’s launch, Bundesverband deutscher Banken (BdB) – a German association that represents more than 200 private commercial banks and 11 member associations – said that its ‘focus exclusively on financial data falls short and creates an imbalance’. The association’s head of digitalisation, Tobias Tenner, said that progress towards data-driven finance “must go hand in hand with data opening in other sectors”.

The launch of a comprehensive review of the application and impact of PSD2 was announced in the Commission’s digital finance and retail payments strategy unveiled in September 2020.

FURTHER READING

‘European Commission adopts new digital finance package’ – our news story (26 September 2020) on the Commission adopting the digital finance package and retail payments strategy