The impact of financial digitalization on ensuring the economic security of a country at war: New measurement vectors

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The military actions in Ukraine have actualized the transformation and revision of existing approaches to assessing the country’s economic security. Financial security, which is considered in this paper through its standard components such as financial sector security, stock market security, debt and budget security, has a significant effect on the formation of economic security. At the same time, digitalization in the financial sector was identified as a new component that provides access to financial resources even in the context of the deployment of hostilities in Ukraine. Therefore, this study assessed the effect of the state of financial security, taking into account the importance of financial digitalization for the economic security of Ukraine.
Based on quarterly data for the period 2015–2021, 42 indicators were analyzed, which were grouped according to the relevant components of financial security, and their integral indicators were determined using the Harrington method. A factor analysis of the formation of economic security was carried out using the principal components analysis, and an integral indicator of a country’s economic security was calculated based on the Kinney multiplicative convolution. The integral indicator of economic security for 2025–2021 doubled and amounted to 0.63 units, which was due to the increased influence of financial digitalization processes, all other components either slowly decreased or were stable. Thus, the reserve of economic security that was formed during this period, including due to the intensive digitalization of the financial sector, allowed Ukraine to survive the first weeks of the war and ensure the functioning of the financial system.

Acknowledgment
Comments from the Editor and anonymous referees have been gratefully acknowledged. Inna Shkolnyk and Yevhenii Kozmenko gratefully acknowledge financial support from the Ministry of Education and Science of Ukraine (0122U000774 “Digitalization and transparency of public, corporate and personal finance: the impact on innovation development and national security”).

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    • Figure 1. Determining the contribution of each of five components of economic security using the scree plot method
    • Figure 2. Dynamics of the integral indicator of Ukraine’s economic security during 2015–2022
    • Table 1. Integral indicators for assessing financial sector security, stock market security, debt and budget security, as well as digitalization
    • Table 2. Specific weight of integral indicators for evaluating financial sector security, stock market security, debt and budget security, and digitalization
    • Table А1. Information base for the study of the financial sector security in Ukraine
    • Table А2. Normalized values of indicators for characteristics of the financial sector security in Ukraine
    • Table А3. Information base for the study of budgetary security in Ukraine
    • Table А4. Normalized values of indicators for the budgetary security of Ukraine
    • Table А5. Information base for the study of debt security in Ukraine
    • Table А6. Normalized values for indicators of Ukraine’s debt security characteristics
    • Table А7. Information base for the study of the stock market security in Ukraine
    • Table А8. Normalized values for indicators of Ukraine’s stock market security characteristics
    • Table А9. Information base for the study of digitization’s general indicators
    • Table А10. Normalized values of general digitization indicators
    • Table А11. Information base for the study of digitization’s specific indicators
    • Table А12. Normalization of the values of digitalization specific indicators
    • Conceptualization
      Inna Shkolnyk
    • Formal Analysis
      Inna Shkolnyk, Volodymyr Orlov
    • Funding acquisition
      Inna Shkolnyk, Viktoriia Datsenko
    • Methodology
      Inna Shkolnyk, Volodymyr Orlov
    • Supervision
      Inna Shkolnyk, Serhiy Frolov, Yevhenii Kozmenko
    • Writing – review & editing
      Inna Shkolnyk, Viktoriia Datsenko
    • Data curation
      Serhiy Frolov, Yevhenii Kozmenko
    • Project administration
      Serhiy Frolov
    • Writing – original draft
      Serhiy Frolov, Volodymyr Orlov, Yevhenii Kozmenko
    • Investigation
      Volodymyr Orlov, Yevhenii Kozmenko
    • Resources
      Volodymyr Orlov, Viktoriia Datsenko
    • Validation
      Volodymyr Orlov
    • Visualization
      Viktoriia Datsenko
    • Software
      Yevhenii Kozmenko