BAKU, Azerbaijan, June 12. The fintech expertise and solutions honed in Uzbekistan present significant opportunities for application in Azerbaijan, Otabek Nasirov, Co-owner and Partner at SBO Insights, said in an exclusive interview with Trend.
"We frequently visit Azerbaijan and see immense potential in its fintech market. Leveraging the expertise and solutions developed by Uzbekistan’s fintech players, we can collaborate with local partners, including the Azerbaijan Fintech Association, the Association of Banks of Azerbaijan, and regulatory bodies. The strong cultural and economic ties between our countries create a fertile ground for joint fintech initiatives," Nasirov stated.
During a forum organized by the Azerbaijan Banks Association (ABA) in Baku this May, SBO Insights and the Azerbaijan Fintech Association signed a memorandum of cooperation. Nasirov elaborated, "This memorandum focuses on collaborative market research in the fintech and e-commerce sectors across Uzbekistan, Azerbaijan, and other regions in Central Asia and the Caucasus. Our research will offer alternative analytical insights to fintech and e-commerce companies, government agencies, international financial institutions, and other stakeholders. It will illuminate market directions, trends, the number of players, and emerging innovative products. We anticipate a fruitful and long-lasting partnership with the Azerbaijan Fintech Association."
Reflecting on Uzbekistan’s fintech evolution, Nasirov highlighted its rapid progress since 2020, spurred by the COVID-19 pandemic which transformed banking and financial services.
"Uzbekistan’s fintech sector has seen remarkable, almost revolutionary growth, outpacing similar developments in neighboring countries like Kazakhstan and Russia. Regulatory support has been pivotal, fostering a competitive environment that benefits consumers by enhancing the services offered by fintech companies in comparison to traditional banks," he said.
However, he noted upcoming regulatory changes in Uzbekistan, effective from July 1, which could significantly reshape the landscape.
"These changes address various challenges such as geopolitical factors, tax evasion, financial literacy, cybersecurity, 'gray' cross-border transfers, gambling, and cryptocurrency regulation. While these regulations could pose challenges, they also offer opportunities for fintech companies focusing on systematic development, innovation, and technology. These companies will likely emerge as key players, providing crucial insights for regulators," Nasirov explained.
He emphasized that this regulatory shift represents the next evolutionary phase for Uzbekistan’s fintech market, aiming to set new standards for the burgeoning sector. The ultimate impact will depend on regulatory feedback and the experiences of fintech service users.
"This aligns with a global trend where regulators strive to secure markets and protect consumers. Stricter international compliance and transparency requirements for cross-border transfers are becoming standard. Notably, a presidential decree signed in April will permit regulated gambling in Uzbekistan starting January 1, 2025. This decision addresses the persistent outflow of money to unregulated gambling zones and aims to harness the economic benefits of legalized gambling through taxation," added Nasirov.