Chernyshova Lyudmila, Candidate of Economic Sciences, Associate Professor, Associate Professor of the Department of Accounting, Analysis and Audit, Odesa National University of Economics, Odesa, Ukraine

ORCID: 0000-0003-3213-6589
e-mail: liylek196322@gmail.com

Impact of Digitalization on Bank Financial Stability: Methodological Approaches to Assessment under Martial Law

Abstract. Introduction. Ukraine’s banking system has faced unprecedented challenges due to the confluence of global digital transformation and the implementation of martial law. Traditional methods of assessing financial stability often overlook the importance of technological infrastructure in maintaining operational continuity amid extreme uncertainty.  

The objective of the study is to substantiate a conceptual framework and develop a comprehensive model for assessing bank financial stability that integrates digital maturity indicators and security risk factors.

The research is based on a systemic approach, using the Saaty Analytic Hierarchy Process to determine weight coefficients and mathematical modeling to calculate an integrated index.

Results. The study introduces the concept of “digital financial resilience,” emphasizing a bank’s ability to maintain critical operations despite physical infrastructure damage. The proposed model was tested using PrivatBank, Ukraine’s digital leader, as a case study. The analysis shows that PrivatBank’s high levels of cloud migration, remote client identification via the Diia state service, and automated cost management enabled the bank to maintain a high resilience index ($I_f = 0.82) despite a significant war risk discount.  

The research further develops the classical CAMELS methodology by incorporating a new “T” (Technology) block, which evaluates cyber-resilience, SLA levels, and digital activity. A unique mathematical formula for the integrated financial resilience index was developed, accounting for wartime asset exposure. 

The findings provide a strategic toolkit for commercial banks to enhance their stress-testing procedures and for the National Bank of Ukraine to modernize prudential supervision standards in a digital economy.

Conclusions. It is concluded that digitalization acts as a primary “cushion of safety” for banks during conflict. Future research will focus on the impact of Central Bank Digital Currencies (e-hryvnia) on the architecture of the financial system and the development of zero-trust security protocols.

Keywords: bank financial stability; digitalization; martial law; CAMELS-T model; cloud computing; integrated resilience index; digital identity; cyber security.

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