Bulletin of V. N. Karazin Kharkiv National University Economic Series

Finance and technology. Trends that determine the development and transformation of banking business

A. Aleksandrov — Thu, 28 Dec 2023 00:00:00 +0000

The article is dedicated to analyzing contemporary changes in the banking business that have occurred since the forced isolation caused by the COVID-19 pandemic. The pandemic rapidly triggered the most extensive transformation in banking technology, client-bank communication, and the emergence of new opportunities driven by digital financial services. The drivers of new services (embedded finance, Buy Now Pay Later (BNPL)) are the Millennials and Generation Z. Cybersecurity risks and digital financial fraud have significantly increased. There is a need for competence growth of skills among both bank employees and clients. A fundamental question has arisen regarding the balance between the use of digital technologies and human involvement in the banking business, leading to a broad expert and academic dialogue (the Phygital challenge). The pandemic also impacted the macroeconomic situation in the global economy. The need for support for the population and small to medium-sized businesses led governments to resort to issuance. The consequences were economic imbalances and inflation growth in leading economies. However, measures to counter inflation and stabilize the economy resulted in an increase in interest rates in the U.S. and the EU, as the world's leading economies. This allows a return to traditional banking practices and a reassessment of interactions with FinTech solutions. The major changes analysis helps to identify the most significant trends influencing modern banking, thereby allowing the forecasting of the development dynamics of the situation.

Fiscal rules: lessons for Ukraine

T. Stetsenko, O. Hlushchenko, A. Khmelkov — Thu, 28 Dec 2023 00:00:00 +0000

The purpose of this article is to assess the systematic implementation of fiscal rules in Ukraine and to provide recommendations for their adjustment. It is proved that the introduction of fiscal rules should be carried out in a comprehensive manner: both quantitative restrictions and security measures of an individual and general nature should be regulated by law. Ukraine has introduced two fiscal rules at the legislative level - debt and budget balancing - and formally prescribed all the security conditions recommended by international experience. The peculiarities of the application of fiscal rules in Ukraine include: vagueness and insufficient detail of the safeguard conditions in the budget legislation; lack of regulation of the activities of an independent body responsible for monitoring compliance with fiscal rules (fiscal council); and insufficient coverage of information related to fiscal rules and lack of systematic publication. Recommendations for improving the fiscal rules in Ukraine include the following: a more detailed description of the mechanism of correction in case of exceeding the budgetary indicators of the established limits; specifying the requirements for activating the procedure for derogation from quantitative restrictions to prevent possible abuse; increasing the level of transparency of information on the application of fiscal rules. Regarding the requirement to establish a fiscal council: there are two possible ways for Ukraine to implement this recommendation: the first is to assign the functions of monitoring the implementation of all fiscal rules to the Accounting Chamber of Ukraine, which has the necessary level of independence and partially performs this function; the second is to take into account the difference in the role of the state auditor and the fiscal council, which should primarily contribute to the formation of fiscal policy, another option is to introduce either a new authority or a separate institution with guarantees of operational independence.

Credit as a key driver of sustainability and economic recovery of Ukraine

N. Doroshenko , K. Chypiha — Thu, 28 Dec 2023 00:00:00 +0000

The study examines the current topic of bank lending in modern Ukrainian conditions. By analyzing the dynamics of credit activity and the financial condition of banks in Ukraine, the work reveals the main problems affecting this sector, such as a large share of non-performing loans, a decrease in the share of long-term loans, and a high lending rate. The conclusions of the work provide recommendations for improving the situation on the lending market in Ukraine. The modern economy of Ukraine is experiencing complex challenges related to the war in Ukraine, which was preceded by the COVID-19 pandemic and the global economic crisis. In this context, the article examines the role of credit as a key driver of economic stability and post-victory recovery. The study is based on the analysis of available data and literature sources, and also uses empirical methods to determine the impact of lending on economic recovery. The article highlights key aspects of lending, such as the role of banks, loan volumes, interest rates and overdue loans. The results of the study emphasize the importance of the development of the financial sector and the promotion of credit availability for enterprises and the population in the context of the economic recovery of Ukraine. The authors provide practical recommendations for the government and regulators to improve the credit environment and stimulate investment activity. This article is aimed at opening discussions and promoting further research into the role of lending in stimulating the economic recovery of Ukraine in the face of today's extremely complex challenges and may be useful for economists, theoreticians and practitioners. The scientific study analyzes how lending can affect the financial stability of Ukraine, in particular, how it can reduce financial risks and contribute to the stability of the economy. The impact of credit availability for various areas and sectors of the economy is considered. The article offers an important contribution to understanding and improving the effectiveness of lending as a tool for the economic recovery of Ukraine, emphasizing the need for a coordinated approach to this issue, taking into account the unique challenges and opportunities that exist at this stage of the country's development.

Investments: classic instruments of the stock exchange or cryptocurrency

N. Grebeniuk , A. Baklanova — Thu, 28 Dec 2023 00:00:00 +0000

The article is devoted to regular analysis of the advantages and disadvantages of various investment tools, namely investing in classic securities of the world stock market or in cryptocurrencies on different platforms. Note that there is very little research on the chosen topic in the Ukrainian scientific environment, and the need for them is growing every day, since practical actions must be based on a theoretical basis. Technological progress is constantly accelerating, currently most of the world's money is concentrated in electronic accounts and wallets. The purpose of scientific work is to analyze the risks and opportunities caused by the chosen direction of investment. The issue of centralization of capital investments on stock markets and cryptocurrency exchanges is considered. The history of the creation of centralized stock markets and decentralized crypto-platforms is traced. The article analyzes the dynamics of growth of the total amount of shares on the New York Stock Exchange and the dynamics of growth and decline of the price of one bitcoin in recent years. The article also analyzes the changes in the Ukrainian stock exchange over the past three years and explains how the situation has developed in the world and separately in the country affects investment and the state of the main joint-stock companies of Ukraine. The actions that led to the stabilization of the stock exchange after the full-scale invasion of Russia and COVID-19 are considered. The study compared two major currency exchanges: the US New York Stock Exchange and the Binance cryptocurrency exchange. It is also indicated how the world's largest stock and cryptocurrency markets reacted to the state of war in Ukraine and ways to help fight against the aggressor country. The largest fraudulent cyber-thefts on the world's cryptocurrency exchanges are analyzed and the amounts of lost funds in millions of US dollars and in the same crypto-coins that were stolen are indicated. Unlike cryptocurrency exchanges, the article describes that stock exchanges have not been robbed of millions of dollars. A SWOT analysis of the advantages, disadvantages, threats and opportunities of investing in instruments of classic stock exchanges and crypto-platforms was carried out. Comparing all the above-mentioned aspects, conclusions were drawn regarding the reliability of the respective exchange and the investment of monetary units of the subjects in the appropriate direction.

Peculiarities of managing gaming communities on the example of Minecraft clans

O. Krupskyi , Yu. Stasiuk, A. Levenets — Thu, 28 Dec 2023 00:00:00 +0000

The paper analyses in depth and highlights not only the peculiarities of managing gaming communities in Minecraft, but also their strategies in the face of constant competition. The authors describe in detail the methods used by these communities to achieve their goals in the virtual environment, taking into account the needs and differences of this type of collective structures. Special focus is directed towards examining how new members interact and the impact they have on the management dynamics within the clan. Highlighting the benefits that a player receives when joining a clan is an important part of the analysis, which opens up new approaches to understanding the motivation of players in choosing certain gaming groups. Not only the effectiveness of player management is investigated, but also the ways in which server administrators facilitate this interaction and generate revenue. The authors reveal specific examples of gaming features that server owners use for commercial purposes, as well as consider strategies for forming clans and their potential sizes. The approach to defining the roles of players in gaming communities is considered to be innovative, enriching the understanding of their functions and contributing to deepening the analysis in this area. This work is currently relevant in the context of the expansion of gaming culture, as it brings to the fore key aspects of gaming communities and can serve as a valuable source of information for players, game team leaders, server administrators, and researchers studying this unique field.

Development of theoretical and methodological approaches to organizing the process of creating ESG reports at enterprises

L. Korchahina — Thu, 28 Dec 2023 00:00:00 +0000

The ESG concept (Environmental, Social, Governance) represents ecological, social, and governance indicators that play a crucial role in numerous sustainable development initiatives. The categorization into three spheres stems from the prevailing global consensus approach aimed at effectively realizing sustainable development. This approach is now referred to as ESG activity, emphasizing the pivotal role that enterprises play in addressing various existing challenges. A study of the level of information disclosure regarding the ESG activity of Ukrainian companies, conducted by The Corporate Governance Professional Association) and the Center for CSR Development Ukraine, showed that as of 2020, only about 20% of the companies they studied published reports that can be classified as ESG reporting , but the fact that in 2019 there were only about 10% of such companies is positive, that is, there is a trend towards an increase in the volume of this kind of reporting. It should be noted that the level of transparency of Ukrainian companies in matters of covering their ESG activity is extremely low. In part, such a weak level of involvement can be explained by the fact that Ukrainian companies generally ignore the processes related to the Sustainable Development Goals (SDGs) achievement - the formation of new approaches to the development of humanity based on a certain set of basic values: the fight against poverty, environmental sustainability, health care efforts, as well as the formation of a global partnership for the purpose of development. An important element of the company's ESG activity management system is communication with stakeholders, which is provided through ESG reporting. In general, ESG reporting is quantitative and qualitative information about a company's environmental, social and management efforts and results. ESG reporting has a number of specific features compared to traditional financial reporting. In particular, ESG-reporting can be mandatory or voluntary depending on the country and the company's field of activity, and the regulation of ESG-reporting, based on its specifics, is mostly supranational in nature.

Development of new alternative energy sources for sustainable energy supply

O. Cherep , A. Cherep, L.H. Oleynikova, E.G. Lyshchenko — Thu, 28 Dec 2023 00:00:00 +0000

It has been established that the needs of mankind in fuel are growing every day. The full energy balance of the countries of the European Union is analyzed and the place and share of alternative energy sources are determined. It is determined that trends in the development of society require the adoption of new, non-traditional solutions that can quickly increase the efficiency of using alternative energy sources, solve the problem of insufficient energy capacity, reduce the harmful impact on the environment and carry out modernization in the shortest possible time and at the lowest cost. The main reasons for this are the expected depletion of fossil fuel reserves, the rapid rise in prices for it, incomplete use and low efficiency, as well as the harmful impact on the environment. The problems of the energy sector of economy are determined. The use of alternative energy sources by EU countries is evaluated, which saves billions of euros on gas purchases. It is proved that despite the rapid changes in demand and oil prices, the tendency to increase the consumption of fuel and energy resources will continue, although the distribution of consumption by industries and countries may change somewhat. A review of theoretical approaches to defining the essence of the concept of «alternative energy» is made and the author's definition of this economic category is provided. Each type of alternative energy sources is characterized, their advantages and disadvantages, which positively or negatively affect the energy sector of the economy and the economy as a whole, are outlined. The problematic issues of using alternative energy sources in modern conditions of management are outlined. It is noted that in recent years, the cost of building small hydropower plants has been significantly simplified by simplifying their design and operation, standardizing design solutions, unifying equipment and full automation of HPP operation, as well as through the use of new materials and finished products. It is proposed to use new unconventional energy technologies that we have explored and can lead the world towards a sustainable energy supply.

Responsible investment benchmarks and information asymmetry in the ESG segment

O. Plastun , A. Lasukova, A. Artemenko, Y. Puhovkina — Thu, 28 Dec 2023 00:00:00 +0000

A significant problem in achieving the Sustainable Development Goals (hereinafter referred to as the SDGs) is insufficient financial support. The size of the investment gap before the pandemic, according to UN estimates, was $3.3-$4.5 trillion per year. The pandemic has significantly exacerbated the already difficult situation with financing, and has also set back humanity in achieving a number of the SDGs. The list of potential sources of offsetting the financial gap includes new taxes on the wealthy and pollution, debt relief for low- and middle-income countries, elimination of tax loopholes, redirection of subsidies from environmentally destructive activities, etc. However, a more market-oriented and gentle solution to the problem, both globally and at the level of individual countries, is the use of responsible investment tools. After all, ESG indicators are taken into account by investors and financial institutions when making investment and lending decisions, as well as by counterparties and suppliers in the course of commercial activities. ESG indicators are information about the environmental, social and governance factors of a company that are key to measuring the sustainability and ethical impact of investments in a company and business. The successful implementation of responsible investment is hampered by the existence of information asymmetry, for example, in the form of ESG mimicry. It means the use of various techniques that indicate the company's involvement in ESG, which is not really true. The goal of this article is to analyze effective methods for reducing information asymmetry in the ESG segment. It is proved that the use of responsible investment benchmarks in the form of ESG ratings can reduce the level of information asymmetry and increase the efficiency of responsible investment. In addition, the paper proposes a five-phase process for creating an ESG rating, which summarizes the experience of the best international practices and allows for more relevant assessments of companies' ESG efforts.

Artificial intelligence technologies in social insurance

D. Zahorska , O. Danylkina — Thu, 28 Dec 2023 00:00:00 +0000

The article discusses the possibilities of using artificial intelligence in the field of social insurance. The relevance of the topic and the importance of using artificial intelligence technology in this area are established, since it can improve the activities of the insurance sector and solve various problems. The purpose of the work is to study the specifics of the use of artificial intelligence technologies in social insurance and their impact. The paper examines current technologies and areas of artificial intelligence application. The software solutions used by social insurance authorities are thoroughly disclosed. It is determined that artificial intelligence technologies are used in social insurance for data analysis, risk forecasting and decision-making. The functions and capabilities of artificial intelligence in this area are widely disclosed in the article. It is established that these technologies can be used to process large amounts of information, to collect customer data, to predict risks, or as a virtual for risk forecasting or as virtual assistants. The author analyzes the challenges and risks that arise when using technology. It is determined that the main ones are problems with confidentiality and access to technology. Options and methods for solving problems are proposed, such as data regulation, development of ethical standards, increasing transparency, etc. In addition, the advantages of using technology in the field of social insurance are identified. These include increased work efficiency, improved quality of service, and reduced fraud. Conclusions are drawn that show that the use of artificial intelligence technologies in the field of social insurance has great potential. This contributes to the development of insurance companies and improvement of their work.

DEFI: a tool for digital transformation of the state

O. Dotsenko, I. Chubka — Thu, 28 Dec 2023 00:00:00 +0000

DeFi is growing in popularity, and the active participation of users in the development of financial solutions determines the success of this ecosystem. The article discusses the key role of DeFi (decentralized finance) in the digital transformation of the state and its impact on global finance. Differences in prevalence and regulation in different countries indicate the need to adapt to different legal environments and financial systems. The author highlights the need for standardization in the context of diversity of approaches and lack of common terminology, which creates challenges for regulation. It is noted that DeFi opens up opportunities for creating more transparent, efficient and accessible financial systems. DeFi, as an innovative industry of digital transformation, has an impressive set of advantages, including decentralization, transparency, and low fees. It is noted that the implementation of decentralized financial solutions of DeFi poses significant challenges to the traditional legal system, including jurisdiction, law enforcement and data protection. The author emphasizes the need for a new legal approach and regulatory mechanisms to address the unique challenges posed by DeFi. The purpose of the study is to analyze the possibilities and prospects of using DeFi for the digital transformation of the state and government. The objectives of the study include analyzing the dynamics of DeFi implementation in public administration, studying the functional features and benefits of this process, studying the factors of investment attractiveness of DeFi, as well as justifying the feasibility of implementing DeFi in government and identifying problems that need to be addressed. Active support for the formation of digital interoperability between countries, taking into account economic, political and cultural differences, is one of the ways to overcome the challenges faced in the implementation of DeFi in e-government. The need to level the digital divide and ensure equal access to digital technologies for all social and geographical groups is emphasized. The key aspects of this approach are the creation of reliable technologies, the development of international platforms for regulation and collaboration, and the creation of a support fund for the development of digital infrastructure and education in less developed countries. Additionally, it is noted that DeFi, as an innovative segment of digital transformation, requires constant adaptation and improvement in the context of changes in the regulatory environment and technological progress. The development of new standards and regulations that take into account the specifics of DeFi is defined as a critical aspect for ensuring the stability and security of this financial sector. In particular, it is important to address the issues of investor protection and transparency in a high-risk environment.