Development of financial inclusion in the banking system of Ukraine

Анотація

Introduction. Over the recent years, financial inclusion has become one of the development of priorities for individual countries as well as of the global community. It is one of the components of financial sector’s mission of the national Strategy of the sector’s development. As banks further dominate Ukrainian financial market, specifics of financial inclusion in the banking sector merits a special research. The purpose of the paper is generalization and estimation of the current state of the financial inclusion in the banking system of Ukraine, identification of major problems that hold back financial inclusion, and outlining prospective lines of its development. Results. As a result of the research, the authors generalized the definition of the financial inclusion in the context of interrelation with inclusion (barrier-free) notion. The authors have analyzed the level of the financial inclusion development. They have shown that Ukrainian population is not sufficiently aware about available financial services, however, the percentage of coverage remains insignificant. Recently, digital technologies, spread of Internet banking, FinTech development, and inclusive banking have become important drivers of the financial inclusion promotion. A map of inclusive branches of domestic banks has been drawn based on the analysis. Conclusion. Based on review of major issues that hold back financial inclusion in the banking sector of Ukraine, we can outline the main lines of its further development: responsible involvement of both banks and non-banking financial institutions to financial services provision; strengthening state regulation of financial services provision, especially in the area consumer rights protection and services digitalization; enhanced responsibility of the financial institutions for breaching legislation on provision of inclusive financial services; setting conditions for emergence of dedicated financial inclusion banks that would be capable to meet demand for financial services in the areas with restricted access to ones; involving a broader scope of participants to financial barrier-free environment; promotion of higher financial literacy, etc.

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