Financial innovation and unemployment in the financial sector: what is the base?

Methods. The study of the impact of financial innovations on unemployment in the financial sector is based on the use of various general scientific methods, such as abstraction – in determining the interrelation between unemployment, innovation, and digitalization. Data collection and analysis were carried out, including both quantitative analysis of statistical data on employment in the financial sector and the volume of investment in fintech and automation, labor productivity indicators, as well as qualitative analysis of the regulatory framework, a review of scientific literature, and case study analysis of specific financial institutions. For the quantitative analysis, data from the State Statistics Service of Ukraine, the National Bank of Ukraine, industry reports, and public reports of large banks were used. Results. The study revealed that financial innovations create a dual effect on employment: on the one hand, they automate routine operations, reducing the demand for traditional professions; on the other hand, they generate new, highly skilled jobs, leading to a skills gap. Innovations also play a key role in financing risky technological projects and adapting the financial system to new challenges. The analysis confirms that financial crises lead to increased unemployment and social instability, often due to unregulated innovations, as was the case during the 2008 crisis. At the same time, despite the full-scale war and demographic changes, Ukraine’s labor market (2021–2023) shows a certain decrease in registered unemployment, associated with declining inflation and an increase in employer job offers. Nowelty. The study identified the dual impact of financial innovations on employment: they reduce traditional jobs through automation but create new ones that require different skills. A particular novelty is the analysis of the dynamics of the Ukrainian labor market under the conditions of full-scale war (2021-2023), which shows a decrease in registered unemployment and positive trends despite demographic losses. It is also important to emphasize that unregulated financial innovations can be a cause of financial crises and subsequent rises in unemployment. Practical value. The current full-scale war in Ukraine has significantly accelerated digitalization processes and population migration, which is influencing fintech innovations and the structure of the labor market in new ways. Research that takes this unique context into account (such as changes in demand for financial services, business relocation, new cybersecurity needs, and the growth of remote employment) will have high relevance and novelty.