Despite regulatory restrictions, currency controls, and stringent licensing requirements, the Ukrainian fintech sector continues to operate and seek opportunities to enter global markets.
Vladislav Zaporozhchenko, founder of the Qiuntex financial group and co-owner of the International Fintech Business (IFB) holding company, spoke — Vladislav Zaporozhchenko, founder of the Qiuntex financial group and co-owner of the International Fintech Business (IFB) holding company, discussed these topics in an exclusive interview.
He is also an expert in legislation regarding virtual assets and cryptocurrencies. Previously, Zaporozhchenko served as an independent director on the supervisory board of IBOX Bank and was a top manager at INDUSTRIAL BANK and CAMBIO BANK.
International Fintech Business (IFB), founded by his team, provides support for fintech projects at all stages of entering foreign markets: from selecting the optimal jurisdiction to obtaining a license. IFB facilitates the process of acquiring and selling financial institutions, as well as mergers and acquisitions (M&A), and ensures integration with global payment systems. The company works with clients from various jurisdictions, including the U.S., Canada, EU countries, Asia, and Africa.
UA.News publishes key insights from a conversation with Vladislav Zaporozhchenko.
The Transformation of the Global Economy and Fintech Services
The global economy is transforming toward globalization. We are seeing the consolidation of currencies and the creation of cryptocurrencies among major banks and financial institutions. Even the European Union is now introducing the digital euro.
Many payment institutions in Europe, the UK, Asia, and the US are already using stablecoins to settle payments with customers. Regulators in both Europe and the UK allow such transactions, but only with legal stablecoins that are officially listed on exchanges.
Qiuntex and Access to Global Payment Infrastructure
The Qiuntex Financial Group currently holds licenses in Poland, Canada, and the United Kingdom. We are also in the process of obtaining a license in Latvia. In addition, we are finalizing the licensing process in Japan. We have already received preliminary approval from the regulator in Tokyo and are actively preparing for a launch this year.
In February of this year, we were also granted a neobank license in Switzerland, which will allow us to enter the crypto market. Switzerland is one of the most “crypto-friendly” countries. Through our Swiss division, we plan to issue crypto cards. I believe that as early as this summer, we’ll see a new Qiuntex product—crypto cards from Visa.
IFB Holding and Startup Support
The IFB business project, which helps startups enter the international market, did not arise spontaneously. Several of my colleagues, knowing about my work experience in Europe since 2017, asked me to help them create payment systems. I saw significant market demand for the development and registration of payment systems. As a banker, it was easier for me to figure this out and help new investors successfully enter the market.
That’s when I began to realize that I was good at this—and quite good, in fact. A team began to form around me. That’s actually how we launched the project, which later grew and became the IFB holding company in 2022. Prior to that, it was a legal division of Qiuntex.
Currently, our main area of activity is mergers and acquisitions. 60% of our business consists of mergers and acquisitions of financial institutions, banks, payment institutions, and investment funds. 30% of our business involves licensing and assistance with connecting to payment institutions such as Visa, Mastercard, SWIFT, and SEPA. 10% consists of company registration and tax optimization for clients.
Regarding requests from Ukrainian clients
There are two main groups of Ukrainian investors. Some want to acquire financial institutions, which is quite expensive. Others are ready to build from scratch and go through the licensing process in a particular European country.
Their requests and needs vary widely: from acquiring and card issuance to simple money transfers or even independently issuing their own token. We’re ready to fully support them at every stage—from the start of the process of buying or selling the company or financial institution itself to obtaining all the necessary licenses. In other words, we’ll help prepare the necessary documentation, train new staff, and get them up to speed. And we can help a startup enter the market fairly quickly—within a year.
About the Competition
They may be able to assist with certain documentation, but handling business transactions and helping to open a correspondent account falls outside their scope of expertise. Such companies cannot obtain a BIC code or connect to SWIFT, Visa, or Mastercard.
International Fintech Business is the market leader, capable of providing comprehensive assistance to new investors in entering the market and meeting all their needs from start to finish. In addition, we have our own software, which we can lease or sell as source code.
Countries Favorable for Fintech Projects
The number one option for a quick market entry is the Canadian MSB (Money Services Business) license. Second is the U.S. MSB license, followed by SPI licenses in Poland. These are arguably the top three licenses that allow you to launch a startup quickly.
The process of incorporating a company is fairly quick and takes anywhere from one week to one month. After that, you can freely manage your license and enter the market. This does not require any special approvals from the regulator and may be a simple notification process. The licenses I’ve mentioned are designed for a quick market entry. They do, of course, have certain limitations, but they’re suitable for a startup with a small budget that’s just beginning to grow.
If we categorize clients by risk level, some prefer to start with acquiring and obtain licenses in the United Kingdom. Companies operating in the gambling industry prefer to obtain payment licenses in Malta. For those looking to quickly enter the Asian market, the Hong Kong MSO (Money Service Operator) license is, of course, considered the top choice, as it can be obtained quickly within 1–3 months.
European integration and joining SEPA could strengthen Ukrainian startups
If we were to move toward harmonizing banking legislation with the European Union, connect to the SEPA electronic payments system, and provide more tools to payment institutions—this would strengthen Ukrainian startups and fintech in general.
Unfortunately, the toolkit of Ukrainian fintech differs drastically from that of Europe. Currently, it lacks the necessary tools. As a result, investors from Ukraine are moving to the European market. Ukraine is simply losing them. There have been previous statements regarding integration into the SEPA electronic payment system and the harmonization of legislation. However, we have not observed any real progress in the banking and financial system over the past three years.
Currently, the requirements for obtaining a banking license in Ukraine are so high that it’s impossible for new fintech startups to launch their operations. Ukrainian payment institutions cannot operate independently without a partner bank. They cannot connect to SWIFT or process international transfers on their own. To do so, they need an intermediary bank. An institution cannot independently open accounts in the national currency, dollars, or euros.
Moreover, even our banking system—in terms of attracting foreign investors and opening accounts—cannot compete with the European Union and other countries as long as currency controls remain in place in the country.
The absence of foreign exchange controls allows international companies to open representative offices in Ukraine and set up accounts there. Consequently, they can accumulate funds and invest them in Ukraine’s economy. However, I believe that in the near future, while military operations continue, we will not see any easing of currency controls. This is because the National Bank uses this tool to prevent the outflow of resources from the country.
It is hard to say how long this situation might remain “frozen.” Ukraine is a candidate for EU membership, which obligates it to adopt EU regulations and directives and integrate them into its legislation. Will we be able to join the European Union while military operations are ongoing on Ukrainian territory? Obviously not.
Accordingly, the extent to which Ukraine will be able to comprehensively revise all its legislation before the end of hostilities will depend on the parliament and, most likely, on the demand within society itself.
We have opened only the first of six negotiation clusters on Ukraine’s path to EU accession. And this first cluster, called “Fundamentals,” covers reforms in the areas of the rule of law, public administration, and the economy. We haven’t gotten to the banking sector yet.
The Integration of Artificial Intelligence
The development of artificial intelligence has its pros and cons. In fintech and the banking system, we’re already seeing active AI assistants in every mobile app. You are no longer connected directly to customer service representatives. You can receive responses from a virtual assistant—artificial intelligence.
AML/KYC systems are also being actively implemented in the customer verification process. Artificial intelligence has been handling targeted, biometric verification of customer data for quite some time. Now, all these systems continue to improve: you can complete video verification and open an account online. Previously, these functions were also provided by artificial intelligence, though it was referred to as an IT system performing biometric verification. Now, new tools are being integrated, and artificial intelligence is expanding access to databases and transaction records. This simplifies operations and reduces the workload on financial monitoring and compliance departments. AI helps identify initial issues with a customer, potentially leading to a refusal to open an account or automatically approving its opening.
Such an AI assistant will perform more than just banking functions. It may be able to place orders and arrange deliveries for you, as well as handle other everyday tasks. It will be a personal financial assistant that helps you manage your money wisely.
Over the past three years, we’ve witnessed rapid advancements in artificial intelligence. Every year, this process gains even more momentum. Errors and bugs are becoming fewer and fewer. However, AI is currently in the early stages of its development and requires continuous training. To bring their product to market, the team must thoroughly refine their AI model and ensure high-quality training.
One drawback I can point out is that artificial intelligence still requires manual verification. In the banking system, it has not yet been authorized for core financial operations: settlements, balance checks, fund balances, and other tasks.
The Development of the Global Fintech Industry in the Coming Years
The transition to stablecoins, globalization, and the move away from cash—this is our immediate future. Although the volume of cash transactions remains stable, there is a growing demand for working with virtual assets and currencies. I believe the future lies with blockchain.
Innovation and the Virtual Assets Law
Obviously, given the complex situation in Ukraine, the parliament should be focusing on socioeconomic issues rather than keeping track of innovations and fintech developments. Although this is also an important issue for attracting investors.
I closely followed the drafting and adoption of the bill on virtual assets and cryptocurrencies. I participated in the working group tasked with drafting this document as a consultant. Unfortunately, virtually nothing remains of the original text of the bill that was submitted to the Verkhovna Rada. As a result, parliament voted on and adopted a new version of the law on virtual assets, which sparked intense debate, particularly regarding the tax amendments.
For the Ukrainian market, this threshold is too high. Therefore, only large or institutional players will be able to take advantage of the new law on virtual assets. For investors with much smaller budgets, access to this segment is effectively closed off.
The Future of Fintech in Ukraine
The National Bank should take the initiative to introduce new draft laws and amend the provisions of the Law on Banks, Banking Activities, and related regulations. It is the NBU that must set the direction for such changes.
The National Bank must focus not only on monetary policy and stabilizing the hryvnia exchange rate—which it is not currently doing very well. This is not the regulator’s primary task. The NBU’s primary task is to stimulate the market and economic growth, create conditions for healthy competition, and raise the level and status of our banking system. The NBU could at least actively participate in international forums, where it has the opportunity to draw ideas for reorganizing Ukraine’s banking system.
We could assemble a top-notch team and organize a forum or conference to develop strategies for reorganizing the banking system. It is important to note that Ukraine has great potential thanks to its specialists and leaders in the fintech sector, including those who are actively working within the European Union.
