BAKU, Azerbaijan, June 19. Azerbaijan has all needed prerequisites for further digitalization, the local representative office of Visa company told Trend.
According to the representative office, this is confirmed by the Fintex Summit held in Baku, the assistance of the Azerbaijani government, and the readiness of banks and such global payment partners as Visa.
All the speakers and participants of the Fintex Summit shared the opinion that this event is one of the most important ones for the field of finance and banking in the entire region - both for bankers, financiers, and for representatives of government agencies and fintechs.
"This year's summit has focused on banking and the financial ecosystem. At the same time, special attention is paid to innovative solutions, fintech and security. According to the organizers, Fintex Summit this year was held through the support of the Azerbaijan Banking Association, the Central Bank of Azerbaijan (CBA), the Ministry of Digital Development and Transport and other actors. At the same time, the Visa global company is a key sponsor of the event," the Azerbaijani office said.
Vice President and Regional Manager for Azerbaijan and Central Asia at Visa Kristina Dorosh noted that the company is doing its best efforts to remove the barriers between fintechs, banks and other financial institutions in the country.
“Small and large businesses are experiencing a variety of waves of economic shock,” Dorosh said, addressing the summit participants.
“Banks and financial institutions have to overcome barriers to expand and accelerate their technologies, and it’s time for Visa to introduce new solutions to help and support businesses, financial institutions and fintech companies,” she noted
The event participants also made speeches on the topic of neobanks.
According to Deputy Director of Russian DIS Group Consulting Division Sergey Yevtushenko, three trends, which are self-confident business leadership, artificial intelligence and machine learning, are global leaders in the field of Intelligent Data.
Speaking about the financial ecosystem of states, Visa's employee involved in srategic and venture partnerships in Ukraine, Georgia, Central Asia and the Caucasus Evgeny Lisnyak noted that in order to achieve success in this area, first of all, regulatory and external conditions must be formed.
According to Lisnyak, Azerbaijan has made achievements in this field: the Central Bank of the country not only supports digitalization, but also presented a strategy for digital payments for 2022-2023. The bank signed a cooperation agreement with Visa to promote digitalization for the above period.
Besides, according to him, the COVID-19 pandemic has contributed to the development of the country's online payment system at a faster pace.
"In 2021 alone, 11.5 million cards were issued in Azerbaijan, 65 percent of which were contactless. At the same time, their number increased by 20 percent (contactless cards – by two times), while 17 percent of ‘non-banking’ citizens are ready to open a card in the next six months," he added.
Partner of Lending and Banking Practice with Simon-Kucher & Partners Benjamin Wellstein said that neobanks appeared 10 years ago, but have begun to expand in recent years.
“In recent years, we have seen a rapid leap in the opening of new neobanks. They often open under new names and are subsidiaries of the main bank,” Wellstein noted.
Speaking about tokenization, Senior Director and Head of Digital Solutions at Visa in Ukraine, Georgia, the CIS and Southeast Europe Oleksandr Stelmakh emphasized that tokenization creates an opportunity for a completely new payment experience using a phone, watch and, possibly, a car in the future.
"It enables simple and simultaneously secure e-commerce purchases. We successfully launched Apple Pay in Azerbaijan last year and are now observing an increase in transactions using this technology, however Azerbaijan is taking its first steps in e-commerce tokenization, so a breakthrough should be expected here," Stelmakh said.
He also stressed that according to the statistics of the Central Bank, the number of e-commerce payments in Azerbaijan in 2021 increased by more than half, calling this a huge leap.
"This year, we also expect their serious growth. Everything that has a digital basis is accelerating. Visa is always ready to provide opportunities for expanding these types of payments," added Stelmakh.
Senior Specialist for the National Payment Systems Development at the Payment Systems and Settlements Department of the CBA Rashad Gasimov stressed that in 2021, compared to 2020, 20 percent more bank cards were issued in Azerbaijan (11.5 million and 9.6 million respectively), the number of POS terminals increased by seven percent (61,000 in 2021 versus 57,000 in 2020), and the number of contactless POS terminals - by 28 percent (from 34,000 to 44,000).
"Such an evolution has led to the fact that digital banking is becoming more and more popular in Azerbaijan. Digital banking accounted for 73 percent of client transfers in 2021," he said.
Gasimov stressed that in the future, for the growth of the country's financial sector, the CBA plans to implement a five-point strategy until 2023:
- improve legislation regarding digital payments (in particular, digital currency and e-banking);
- expand infrastructure coverage for digital payments (implement the ISO 20022 standard);
- develop a regulatory framework for the payment ecosystem (API standard, QR codes and tightening cybersecurity requirements);
- increase the level of inclusion of digital payments (preparation of the concept of digital manat and launch of the e-KYC system); and
- promote the development of digital literacy and the popularity of digital payments among all segments of the population of Azerbaijan.
According to Gasimov, the ecosystem of digital payments in the country will develop only with the proactive position of all its participants.
At the same time, not only the Central Bank, banks and AzerPost, but also fintechs, global payment organizations and processing centers are important elements of this structure, he added.
The Fintex Summit on Finance and Technology was held in Baku on June 16-17.
