February 21, 2024

Since March 1, foreign instant messaging services such as Microsoft Teams, Discord, WhatsApp and Telegram have been banned from providing financial services in Russia. In response, Russian state-owned bank VTB is creating a digital bank within mobile messaging app VKontakte.

By using the Vkontakte app, customers will be able to make certain bill payments, send money, and even top up their mobile phones.

Anatoly Pechatnikov, Deputy Governor and Chairman of the Management Board of VTB, explain In the briefing:

“VTB is focused on developing digital channels and alternative formats to serve customers. The development of our own technology is particularly important in the context of geopolitical risks and international restrictions.”

financial impact

Russia’s invasion of Ukraine had massive consequences and continues to disrupt its financial sector.

CNN Report Russia’s leading lender Sberbank will lose almost 80% of its net profit in 2022. German Gref, CEO of Sberbank explain 2022 is the “most difficult year”. Russia’s second-largest bank, VTB, is also struggling.

In addition, Russia’s central bank warned of “systemic risks” in the banking sector, creating a domino effect as banks struggle to turn a profit.

The country was also hit by a string of financial events last year, with the ruble losing 25 percent to a record low against the dollar. The Russian central bank then raised interest rates to 20%, more than double the normal level, and the Moscow Stock Exchange had to close for the day.