Ukrainian banks made a strong recovery amid a severe liquidity crisis compounded by dwindling consumer confidence and a surge in withdrawals following Russia’s invasion last year, a top official with the largest state-owned lender has said.
The recovery was bolstered by technological advancements, Mariusz Kaczmarek, chief operating officer of Dnipro-based PrivatBank, told media.
“We were fighting against death and we realised it was better to try and fail than not to try at all and eventually be destroyed,” Mr Kaczmarek said.
“Servicing Ukrainians during those difficult times was our priority … creating a trust and ensuring they can rely on us.
“There were a rampant withdrawing of funds and people fleeing the country but soon they realised that the country is much stronger than they anticipated. They gained confidence and started to bring back their funds in their accounts.”
Founded in 1992, PrivatBank is the largest retail lender in Ukraine that is focused on servicing individuals as well as small and medium businesses.
It operates two data centres – one in the capital Kiev, while the location of the other in Ukraine’s eastern region remains undisclosed. They house confidential data including customer information, financial records, security data, regulatory compliance data, back-up and recovery data.
After the Russian invasion, there was an imminent risk of an attack targeting these data centres to jeopardise the bank’s crucial operations. It could severely disrupt a financial system that facilitates more than half of Ukraine’s ATM cash withdrawals, Mr Kaczmarek said.
Therefore, after the invasion in February 2022, PrivatBank migrated its operations on Amazon Web Services cloud in a record 43 days.
However, navigating the intricate migration process was not easy.
It posed significant challenges for the government bank as it was bound by stringent regulations prohibiting the placement of sensitive consumer data on third-party platforms and inhibiting the relocation of data centres beyond national borders.
“Can we move our thousands of servers somewhere else to the West? It was impossible to move them using trucks because of the traffic and frequent air strikes. We were also not allowed to put the clients’ sensitive financial data on third-party cloud,” Mr Kaczmarek said.
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