“Business can grow even during the war.” The results of the year by CEO at LEO Alona Shevtsova: Realities of the Ukrainian fintech sector in the military conditions of 2022
Even though Ukrainian businesses are used to turbulent conditions, the war resulted in a terrible decrease. Such things as the permanent suspension of payment processing, the transition to the cloud, and the connection of new European partners are key elements of the story of the adaptation of the fintech market. This case was explained in detail by the CEO of the LEO International Payment System Alona Shevtsova for the Ukrainian edition of Forbes.
On February 24, the LEO International Payment System had to suspend the majority of the financial transactions. At that time, it seemed that it would be impossible to restore the overall volume for at least the upcoming year. This decision was made by the management while waiting for the instructions of the NBU to continue operating in wartime, as well as to ensure proper conditions for the team. Our employees were in Kharkiv, Chernihiv, and Sumy. We had to implement a set of radical measures for about two days. And I have to say that the result of such an emergency had to be eliminated for the next four months.
Why was it like that? First of all, all the forces of our technical team were focused on providing a proper level of server security in the first months of the war. We focused on switching to a cloud solution from Amazon in order to prevent data loss and emergency shutdown due to the active bombing phase. Before the war, the servers of financial and banking institutions had to be located on the territory of Ukraine according to the requirements of the NBU. Secondly, due to the current situation, we had no regular and adequate communication with partners. People were mostly worried about the safety of employees and their families. As a consequence of military actions, we had to perform the relocation of our team. We understood that it was impossible to work under shelling, so, we partially moved our employees to our offices in L’viv and Warsaw.
After surviving for the first four months, we began to observe a positive trend in the company’s financial turnover. Already by June, we managed to resume the majority of our payment transactions. By the autumn of 2022, we returned to pre-war indicators. There are several factors that were crucial to achieving these results.
One of the main products of the LEO financial company is P2P money transfers. When the war started, P2P money transfers became the most convenient way to send donations. We have seen the flow of donations from all around the world. This feature is also popular because many families had to leave their homeland. Today they perform money transfers in colossal volumes. In addition, LEO has also expanded its geographical presence, which seemed impossible before. It happened because the percentage of our users in other countries has grown significantly, for example, in Italy and Spain.
In 2022, LEO managed to move one step higher in the list of the largest domestic money transfer systems. According to the NBU, we hold third place, while only NovaPay and Ukrposhta are ahead of us.
Despite the reduction of budgets of Ukrainian companies, we continued to implement advertising activities. For the first six months after the start of the war, the LEO financial company offered its partners discounted commissions for transferring money to Ukraine. Sometimes, there was no transaction fee at all. First of all, it helped people save their money, as well as find a convenient and reliable provider.
Of course, there are processes that we cannot restore even today. One of them is the provision of the full range of services in IBOX terminals. Power outages in many cities of Ukraine complicate the operation of the company. At the same time, such services as Steam or Viber Out provided by LEO are not available today. It is worth noting that already in the summer, our partners from the IBOX terminal network managed to achieve pre-war financial results.
It is important to highlight the impact of the war on the overall mood of the team. We all know that it is simply impossible to avoid all the consequences of the shelling, but we prepared our offices for possible blackouts. We bought generators and charging stations, installed StarLink, and prepared a supply of food and water. Active preparation for such events allows reducing tension among colleagues. Our employees and partners know that they can rely on us. We are available 24/7, and our employees in Warsaw are always ready to help.
In addition, we took care not only of the team but also of our customers. The NBU launched the POWER BANKING project, which was actively supported by IBOX BANK and many other Ukrainian banks. The team prepared eight of our branches for long-term blackouts by purchasing generators and StarLink terminals. These branches are able to function continuously and provide banking services even with total outages. Currently, more than 1,000 branches of various banks have been properly equipped in all regions of the country.
2022 has become a serious test for any business, whether it is an online or offline company. The pandemic taught us a lot, but the war forced us to invent new means of preserving profitability. At the end of this brief review, I would like to thank the Armed Forces of Ukraine for the courage and heroism that they show every day on the battlefield! As a business, we are going to continue to support the economy of our country.