THE ESSENCE AND SIGNIFICANCE OF INFORMATION SECURITY IN BANKING ACTIVITIES

Abstract

The article explores the theoretical and practical principles of forming and improving the mechanism for managing the financial and economic security of banking institutions under conditions of economic instability, accelerated digitalization of financial services, and heightened military and geopolitical challenges. The relevance of the study is substantiated by the growing vulnerability of the banking sector to systemic financial risks, cyber threats, operational disruptions, and external shocks, which directly affect the stability of the national financial system and the sustainable development of Ukraine’s economy.

The paper summarizes modern scientific approaches to interpreting the concept of the mechanism for managing a bank’s financial and economic security and clarifies its role as an integrated system aimed at preventing, identifying, and minimizing internal and external threats. The main functions, principles, and structural elements of this mechanism are identified, taking into account regulatory requirements, digital transformation trends, and risk-oriented management approaches. The mechanism is systematized in the form of interconnected information and organizational, functional and analytical, and control blocks, which together ensure comprehensive financial risk management and effective decision-making.

Special attention is paid to the practical aspect of improving the financial and economic security system using the example of JSC CB “PrivatBank”. In particular, the feasibility of implementing blockchain technologies for storing and protecting information security logs is analyzed as an innovative tool for enhancing data integrity, transparency, and resistance to cyber threats. An economic assessment of the proposed blockchain solution is conducted, including the calculation of efficiency indicators, return on investment, and payback period.

The results obtained confirm the economic efficiency and practical feasibility of using blockchain technologies to strengthen the financial, economic, and information security of a banking institution. Based on the findings, promising directions for the further development of the financial and economic security system of banks in Ukraine are formulated, with an emphasis on digital resilience, adaptive risk management, and sustainable institutional development.