In an interview with Ukrainian Forbes, CEO of LEO International Payment System, and shareholder of the IBOX BANK from Ukraine Alona Shevtsova tells the audience about the struggles of Ukrainian business during wartime. She also shared interesting details of a large-scale integration process between Poland and Ukraine.
About the operation of LEO and IBOX BANK
Initially, people all around the world assumed that the war would last just 3-4 days. Therefore, IBOX BANK kept all branches open for customers from 9 am to 6 pm as usual. After 3 months, I can confess that it was a catastrophic mistake. It was a huge mistake to open branches, especially in frontline areas, thus risking the lives of employees. Each of our employees is irreplaceable. It was a gross mistake of the managers and shareholders of the bank. Therefore, we changed the approach and took care of the safety of all employees.
After the relocation of our colleagues, we faced the problem of evacuation of servers, and equipment, as well as constant DDOS attacks on data centers. That was the moment when the process of migration of our resources to other data centers in Ukraine and abroad began. We have increased the performance of our servers and are now following the instructions of the NBU to support the economy of Ukraine. By the way, during these three months, the NBU has never stopped the operation of the financial system, and we are incredibly grateful for their hard work.
Regarding our terminals, the company and the bank lost a significant part of the equipment in the first days of the war. In other words, we lost about 40% of our terminals. According to our strategic partner, the Ibox Terminal Network, around 15% of terminals were damaged or destroyed. We also have a lot of issues in the field of cash logistics. We have to face problems with fuel, personnel, security, and logistics.
As of today, the main goal for us is to maintain the vital activity of IBOX BANK whenever possible. Nevertheless, the bank is a part of the critical infrastructure of Ukraine. Our bank provides work to more than 500 employees. Talking about LEO, we decided to keep working places for 120 people. Now our team is partially located in Poland and in Ukraine.
Retention of the profitability level of IBOX BANK
Profitability and marginality are astonishing words. Today, the IBOX BANK, as well as the entire banking sector, operates in the concept of zero profitability. And it is especially important to us to avoid transforming zero profitability into operational losses. In order to avoid it, our top management performs all possible actions to support the overall result.
About operation in the temporarily occupied territories
The local payment services market has transformed. It can be seen in the financial constraints of the NBU within Ukraine, as well as in the capabilities of banking institutions and the solvency of the population. The negative consequences are especially obvious in the temporarily occupied territories.
Unfortunately, the process of introducing the ruble zone has already begun. At this moment ruble is being imposed on Ukrainians. This currency has to be used to purchase basic necessities such as bread, milk, and water. Therefore, people are forced to change the hryvnia at a very strange rate, as well as to withdraw money from cards. We understand that terminals are not working yet in the occupied territories.
At the same time, it is impossible to introduce a ruble zone by changing the price tags in grocery stores. The main goal for the occupiers is to replace Ukraine’s banking system with their own. We monitor the Russian market daily and take the statements of the regulator about the intentions of some banks to open branches in Kherson, Melitopol, and Mariupol into account. We are talking about sanctioned banks, which are not recognized by any financial institution in the world. It is difficult to assess the unambiguity of this process, but it is too early to talk about the success of the introduction of the ruble zone.
State of business after Ukraine’s victory
Despite the fact that we have opened an office in Poland, the center of vital interests of the LEO and IBOX BANK group of companies remains in Ukraine. As an entrepreneur, I constantly ask myself the most important question: What is the plan for restoring the country’s economy after the war?
One of the key solutions is an international partnership. Today, a large-scale integration process is taking place between Poland and Ukraine. This process is moving by leaps and bounds, primarily due to the loyal policy of the President of Poland and the whole country. I am talking not only about military support but also about the integration of Ukrainian business into the Polish economy. We understand that the number of goods and services that Ukrainians will export to Poland will increase by ten figures in 2022-2023. The first fruit of this integration is the official launch Diaa.Business in Warsaw. The main goal is to help Ukrainians to formalize themselves as immigrants or open their businesses in Poland.
No doubt, we have other partner countries. But they are not yet as open to Ukrainian business as Poland. This country is likely to become the second location for the head offices of the bank and the payment system.
I want to finish my article with the amazing news: At LEO and IBOX BANK, we decided to make a movie about the life of our team from February 24 to the current moment. We are going to show what Ukrainian business is going through during the war. We are going to film real participants of these events. We will tell you about the most difficult moments and the united spirit that helped to resist the enemy.