In an era where digital transformation is reshaping industries across the globe, the finance sector of Azerbaijan stands as a testament to innovative progress and strategic foresight. Namid N. Abdulov, a leading figure at Azər Türk Bank, delves into the intricate journey of digital evolution within the Azerbaijani financial landscape.
From the implementation of groundbreaking fintech solutions to the pivotal role of governmental decrees, Abdulov provides an insightful overview of the steps taken towards enhancing digital infrastructure, boosting financial literacy, and fostering collaborative growth. This interview unveils the concerted efforts of banks, governmental, and non-governmental organizations in embracing digital advancements, highlighting unique local innovations and the potential for regional collaboration in the finance and fintech sectors.
How has digital transformation affected the finance industry in your country?
I would like to report that in recent years, significant efforts have been made in Azerbaijan towards managing digital architecture and developing platforms for digital services and solutions in the financial sector. These initiatives are ongoing and continue to progress.
The national authorities have signed a relevant decree on ‘Improving Management in Digital Transformation,’ and the implementation of the tasks arising from this decree is being carried out in coordination with both governmental and non-governmental organizations. This execution is being jointly coordinated. Even the banks considered as the major participants in the financial ecosystem are closely involved in this process, striving to benefit from digital transformation and its offered advantages. Banks that have implemented digital innovative solutions currently prioritize the collection of potential customer data through various channels, the analysis of gathered information, and the process of customer credit evaluation.
However, I do not exclude that in the future, banks will be able to increase their operational revenues by using ‘Big Data’ technology and implement the sale of both financial and non-financial products through cross-selling methods. For this purpose, banks should already start establishing the necessary platforms and adapting to new technologies.
What are some unique local fintech innovations that you would like to highlight?
I would like to provide information about the latest innovative solutions of Azər Türk Bank. The bank’s new strategic plan has identified significant priorities regarding the implementation of digital transformation and innovations, and we have already commenced the execution of these tasks. Our goal isn’t solely about customer financing. We’ve planned to provide various tools and solutions to financial organizations, payment facilitators, and aggregators in the region to develop their businesses, and we’re already executing these plans. We are aiming for and implementing the provision of functional API Gateways, utilizing MobilePOS (VAC) built on Cloud technology.
Additionally, we are deploying technologies that accept cards from all payment systems prepared on cloud technology, supporting token payments such as ApplePay, GooglePay, SamsungPay, AndroidPay as payment methods. At the same time, Token Management service and Fraud Management service have been introduced, allowing sensitive card information to be stored in tokenized form for payment facilitators and aggregators. This has created conditions for conducting operations based on AI technology for fraud analysis. It brings us joy that many of the mentioned technologies are being introduced for the first time in our region, spanning Eastern Europe and Post-Soviet countries, by our bank.
Currently, Azer Turk Bank continues the process of developing and refining innovative solutions, and we believe that this will sufficiently meet the demands of fintech companies.
Are there any outstanding or unique initiatives and trends that you are proud of from your country?
I’d like to share that Azer Turk Bank initiated the Transportation project based on EMV technology for the first time in Azerbaijan in 2021. The project, which is currently progressing successfully, is starting to be implemented in major cities of Azerbaijan, and this trend brings us joy. The project itself reflects not only the acceptance of payments in Public Transportation but also the establishment of an entire smart transport ecosystem.
Here, all the facilities have been created for the issuance, sale, recharging, and checking of balances for Public Transportation cards. To ensure the seamless operation of the ecosystem, validators, vending machines, the internet page, and the mobile application have been provided. The ecosystem combines many elements of the SmartCity project, and we hope that these capabilities will be utilized in future SmartCity initiatives.
Where do you see the greatest opportunities for collaboration in your region within finance and fintech?
I see the utilization of Global Merchants receiving services from banks or aggregators operating in Azerbaijan as one of the greatest opportunities for collaboration in the region’s finance and fintech sectors. For this, they should be provided with both innovative and secure platforms. The mentioned collaboration will be beneficial for all ecosystem participants and, I believe, will serve the country’s economic and political interests.
What is the level of financial literacy in your country in general?
I think that financial literacy in Azerbaijan is still not at the level that satisfies us. The Central Bank has several programs and projects in place aimed at improving financial literacy. However, in recent years, commercial banks have started to show serious commitment to this process. People’s inclination towards banking products, especially credit cards offering special privileges, has increased significantly. The repeated growth dynamics of cashless payments confirm this fact. This, in turn, has created a necessity for commercial banks to take serious steps towards increasing the financial literacy of their customers and preserving their own reputations. I believe that this created necessity will have a significant impact on increasing financial literacy.
Conclusion
Reflecting on the insightful perspectives shared by Namid N. Abdulov, it’s clear that Azerbaijan is on a path of significant digital transformation within its finance industry. The country’s commitment to integrating advanced technologies, promoting financial literacy, and pioneering unique fintech innovations positions it as a leader in the regional financial ecosystem. As Azerbaijan continues to navigate the challenges and opportunities of the digital age, the collaborative efforts between banks, governmental bodies, and fintech companies promise to propel the nation towards a future where financial services are more accessible, secure, and tailored to meet the evolving needs of its people. Abdulov’s vision for a digitally empowered Azerbaijan not only underscores the potential for economic growth but also sets a benchmark for innovation in the global finance industry.
(Cover photo: Depositphotos)
