DIGITALIZATION OF BANKING INTERMEDIATION AS A TOOL FOR ENSURING THE LIQUIDITY OF SMALL BUSINESSES
Abstract
The article investigates the role of banking financial intermediation within the processes of digitalization and the digital transformation of small and medium-sized enterprises (SMEs) as a critical mechanism for ensuring their liquidity and financial sustainability. In the contemporary digital economy, SMEs — which generate over 60% of GDP and provide the majority of employment in many countries — are increasingly positioned as primary recipients of innovative financial services. Digital platforms are becoming essential tools not only for operational optimization and transaction cost reduction but also for broadening access to affordable financing. The research analyzes the transformation of traditional banking models under the influence of emerging digital technologies, emphasizing the integration of financial technologies (fintech), artificial intelligence (AI), blockchain, cloud computing, and open banking protocols (API). These technologies have substantially enhanced SMEs’ access to credit, financial advisory services, and risk management mechanisms. A comparative analysis of Ukrainian banks (notably Monobank and PrivatBank) and international digital banking practices is presented. Ukrainian institutions, in several cases, outperform global benchmarks in terms of service efficiency, user experience, and technological innovation. Monobank’s fully digital model and PrivatBank’s achievements in mobile banking and biometric security are highlighted as successful case studies of digital transformation in emerging economies. The article further explores international evidence, including findings from IDnow indicating that 64% of UK customers prioritize digital banking capabilities when selecting financial institutions. The necessity of customer-centric, flexible, and cost-efficient financial solutions tailored to the needs of SMEs is emphasized. It is concluded that banking institutions must intensify efforts to integrate digital innovations, collaborate with fintech companies, and develop agile, technology-driven service models. The ongoing digitalization of banking is identified not as a transient trend but as a strategic imperative for enhancing financial intermediation, promoting financial inclusion, and reinforcing resilience. Ukraine’s experience offers valuable lessons for other economies undergoing similar digital and economic transitions.
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