The NBU has revised its institutional strategy for the second time since the war began. Here’s what has changed.

The National Bank of Ukraine has updated its institutional strategy for the second time since the onset of Russia's full-scale invasion of Ukraine, concentrating on resisting Russian aggression and rebuilding the country. Specifically, the regulator has revised and expanded the list of priority measures in the NBU Strategy.

Details can be found on the National Bank's website.

It is noted that the strategy update will enhance the effectiveness of the National Bank's operations in a rapidly changing external environment, increasing readiness for new challenges and various scenarios of events.

Consequently, the regulator has supplemented the list of priority tasks with several relevant actions and refined indicators, including:

- within goal 1 "Stable Hryvnia," the National Bank has planned to achieve more ambitious targets regarding price stability, inflation expectations, and exchange rate resilience;

- within goal 2 "Financial Stability," new measures have been added aimed at:

• strengthening the continuity of operations for financial sector participants;
• improving requirements for risk management systems in banks;
• identifying and responding to connections with the aggressor state in the ownership structures of financial market participants;
• creating registries of drops and miscoding, ensuring counteraction to existing and new drop schemes;
• ensuring the resilience of critical financial sector infrastructure;

- in connection with the deepening of the Eurointegration direction, the name of goal 3 has been updated to "The Financial System Works for the Country's Recovery and Integrates into the EU" along with the list of initiatives for its achievement. Thus, the National Bank's efforts will additionally focus on:

• integration into the EU financial services market;
• developing and implementing ESG policies for the financial sector;
• complying with corporate governance system requirements for financial market participants (continuously, with a risk-oriented approach);
• stimulating the development of financial inclusion, particularly considering the needs of war veterans in Ukraine;
• initiatives for developing lending and financial literacy for the population and entrepreneurs, particularly regarding new inter-agency strategies (Lending Development Strategy and the National Strategy for Financial Literacy Development until 2030).

"Additional indicators for implementing tasks under this goal include the opening of negotiations on Ukraine's EU membership across negotiation clusters that involve sections chaired by or involving the NBU, and the updated Comprehensive Plan of the National Bank for European Integration in line with the progress of the negotiation process," the statement reads.

Within goal 4 "Modern Financial Services," the National Bank plans to:

• strengthen control over cybersecurity, information security, and digital operational resilience, particularly considering EU legislation on the digital operational resilience of the financial sector (DORA);
• expand the scope of activities related to the regulation and supervision of virtual assets;
• specify measures for the development of cash circulation in accordance with the approved model of cash circulation organization in Ukraine and the infrastructure of the National Bank.

In addition, additional indicators for implementing tasks under this goal include the introduction of regulations aimed at applying cloud computing technology and providing cloud services, as well as preventing the use of software solutions from suppliers linked to the aggressor country.

Within goal 5 "Effective Central Bank," the list of priority measures aimed at ensuring the uninterrupted performance of the National Bank's functions under any conditions has significantly expanded. Specifically, this includes:

• developing security systems and organizing the National Bank's tasks as a critical infrastructure operator;
• building and developing the NBU Sectoral State Archive;
• developing and gradually implementing ESG policies for the National Bank;
• regulating the change management process in the central bank;
• developing the regulatory authority's innovative potential (including the development of the NBU Digital Transformation Strategy), researching artificial intelligence, and implementing it into the central bank's processes;
• refining measures aimed at developing human capital, particularly regarding corporate culture development and the reintegration and adaptation of war veterans at the National Bank.

The NBU reminded that at the end of 2024, the National Bank team held a strategic session where modern trends, threats, and opportunities for the financial sector and the National Bank were thoroughly reviewed and specified, the current roadmap of the NBU Strategy measures across all strategic goals was verified and expanded, and the indicators for their achievement were updated.

As a result of the update, 11 new indicators were added to the NBU Strategy, and six existing ones were refined. The roadmap of measures in the updated document was supplemented with 17 new substantive actions, and another 45 actions were clarified or transformed according to current challenges.

Reference.

In May 2023, the National Bank presented its strategy titled "Financial Fortress," focused on resisting Russian aggression and rebuilding the country. This is a flexible document that is periodically updated, considering changing and unpredictable external circumstances. The first update of the strategy occurred a year ago – in January 2024.

Background. Earlier, Mind reported that the NBU updated its macroprudential strategy: focusing on the risks of war and ESG factors. The new document particularly emphasizes operational continuity and the adaptation of lending programs.